What happened

Shares of Tesla (TSLA 1.50%) were slammed on Thursday, falling as much as 10.7%. As of 10:53 a.m. EDT, the stock was down 8.4%.

The decline comes after the electric-car maker announced worse-than-expected first-quarter vehicle production and deliveries on Wednesday evening.

A woman unlocks her Model 3 with a Tesla app on her smartphone

Model 3. Image source: Tesla.

So what

Deliveries for the quarter came in at 63,000, up 110% year over year but down 31% sequentially. On average, analysts expected Tesla to deliver 74,900 vehicles. 

Production was also lower than expected for the quarter. Tesla produced 77,100 vehicles, compared to the consensus analyst estimate for 84,700. The primary reason for this shortfall was a 45% year-over-year decrease in Tesla's combined Model S and X production. Model 3 production of 62,950 vehicles, which was at a record high, was only 2.3% lower than analysts' average forecast.

The sequential decline in total vehicle deliveries was primarily due to challenges with the company's expansion to Europe and China.

Now what

Difficulties with shipping vehicles to customers overseas and several price cuts made during the quarter are expected to negatively impact net income, Tesla said. A loss for the period is likely since such a substantial drop in the sales of the company's pricier, higher-margin Model S and X will weigh heavily on results.