Tesla admitted a 31 percent drop in car deliveries for the first quarter, which dragged its share prices down more than eight percent in trading on Thursday.

The electric car company said that it delivered about 63,000 vehicles in the first quarter, including 50,900 Model 3s.  But that fell short of analysts expectations of around 76,000 vehicles, including 54,600 Model 3s.  Sales of Tesla's luxury Model S and Model X vehicles were down 50 percent quarter on quarter.  Despite this, Tesla is standing by its forecast of delivering 360,000 and 400,000 vehicles for the year.

Tesla blames the drop on problems shipping the Model 3 to China in March after customs authorities suspended clearance because of misprinted labels on certain cars.  A strike at the Port of Zeebrugge interfered with Tesla's deliveries in Europe.

Many see the Model 3 as the key to company's future.  It is the company's lowest-priced car, but the long-awaited base model doesn't even exist yet.  Tesla had said it would sell a Model 3 with a "Standard" battery pack for US$35,000.  But instead, the company reportedly has been trying to switch buyers to a more expensive vehicle with the "Standard Plus" battery pack.

Meanwhile, Elon Musk appeared in a Manhattan court where a federal judge urged him to settle with the US Securities and Exchange Commission, which which wanted him held in contempt for continuing to tweet about Tesla despite last year's court order.  The two sides have two weeks in which to work it out.