Even Tesla is struggling to sell EVs - analysts predict Elon Musk's market-leader faces first sales decline since the start of the pandemic

Wall Street is bracing for the first Tesla sales decline in four years as appetite for electric cars continues to slow.

Analysts from Deutsche Bank and Wedbush have cut their estimations of first-quarter deliveries amid multiple setbacks, including factory closures and increased competition.

On Tuesday, Tesla will report how many cars it produced and delivered during January, February and March. Some experts think the number will be 15,000 lower than over the same period last year.

The last time it saw a year-on-year decline in deliveries was in the first half of 2020 when car makers had to shut down factories due to Covid.

Its share price has gone into reverse during the first three months of the year, falling more than 30 percent - the largest decline of any S&P 500 company.

In the first quarter of 2023, the company delivered about 429,000 cars but analysts from Deutsche Bank have predicted that this year's first-quarter deliveries could dip to 414,000.

'We think worries over volume and earnings could further dampen investor sentiment and put significant pressure on the stock,' they wrote in a report on March 28.

And investment firm Wedbush recently said in a note that deliveries have been a 'nightmare' this quarter.

Analysts said if Tesla reports anything higher than 420,000 cars that would be a relief for investors - but it could have shipped less than 410,000.

Wedbush said delivery estimates for the first quarter 'have now gone from 475k to 425k as Tesla saw a perfect storm of demand issues hit this quarter.'

Both Wedbush and Deutsche Bank pointed to headwinds in China as justification for the low projections.

'The biggest and most concerning issue for Tesla (and its investors) remains China as rising EV competition and a lingering price war has made this key market very challenging for Tesla the last year and especially the last quarter,' read the Wedbush note.

Other setbacks in the first quarter were shutdowns of its factory near Berlin, Germany, and the slowing of production at a plant in California as it shifted to manufacture an upgraded Model 3.

Chinese automaker BYD, once mocked by Elon Musk, overtook Tesla in deliveries in the fourth quarter of last year.

The threat it poses has persisted into this year too. On Tuesday the Warren Buffet-backed firm reported sales up 13 percent from a year earlier in the first quarter.

In recent months BYD has launched the Qin Plus EV and the Seagull, starting a $15,200 and $10,000 respectively.

Musk previously hinted delivery figures might slide when he told investors in January that the company is 'between two major growth waves'.

He claimed the first wave was triggered by the release of affordable models like the Model 3, which started shipping in 2017, and later the Model Y, which started shipping in 2022. The two vehicles are among the best-selling EVs in the world.

It is not until late next year that Tesla is expected to begin production of an even more affordable next-generation vehicle, according to Reuters. Its sales woes may therefore persist for some time.