11:53 AM EDT, 04/03/2024 (MT Newswires) -- Tesla's (TSLA) Q1 delivery figures were a "big miss" even amid a "very lowered bar," UBS said in a note to clients emailed on Wednesday.

The company said Tuesday it delivered 386,810 vehicles for the March quarter, compared with projections on Visible Alpha for about 454,200 units. It made 433,371 vehicles during the three-month period, lower than the forecast for 462,100 units.

"Based on our conversations, buy-side expectations were lower, with the 'bogey' likely ~415k-420k," said UBS analysts including Joseph Spak. "The lowest buy-side expectation we heard was ~400k, and results were ~3% below that figure."

The analysts said that "unique events" during the quarter -- such as ramping the refreshed Model 3 at the Fremont plant, downtime caused by the Red Sea disruption, and an arson incident at the Berlin plant -- hit production but demand seems to be slowing.

"Showing a y/y delivery decline, especially at a rate greater than production decline, will do little to ease market concerns over growth," the note said.

Meanwhile, the focus for Tesla's quarterly results slated for April 23 will now likely turn to margins, UBS said.

"We believe current expectations for auto gross margins ex-credits are too high (consensus for 1Q24 was ~16%, UBS at 13.9% before this release)," the analysts said. "Further, we believe the market will re-evaluate growth expectations not just for 2024, but also 2025 with some downward revisions likely, in our view."

UBS has a neutral rating on Tesla and a $165 price target.

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