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April 2 (Reuters) - Tesla TSLA.O missed Wall Street expectations for first-quarter deliveries on Thursday, reporting its weakest numbers in four quarters, as fading U.S. incentives and intensifying global competition pressured its core electric vehicle business.

Shares of the Elon Musk-led company fell nearly 4%, after losing about 15% so far this year.

Tesla also produced 50,363 more vehicles than it delivered in the first quarter, the widest gap in at least four years, pointing to a build-up in unsold inventory.

The company is grappling with a shifting landscape, having lost its crown as the world’s largest electric vehicle maker on an annual basis to China's BYD 002594.SZ last year. For the first quarter, however, BYD reported battery-electric vehicle sales below Tesla's total.

Tesla's China-made electric vehicle sales also rose for a second consecutive quarter. For the January-March period, sales increased 23.5% from a year earlier, accelerating from a 1.9% rise in the fourth quarter.

The company delivered 358,023 vehicles in the January–March period, falling short of analysts' average estimate of 368,903, according to Visible Alpha data.

Deliveries dropped 14.4% from the previous quarter, reflecting seasonal weakness and softer demand, but rose 6.3% from a year earlier, when protests against Musk's far-right politics had pulled down demand.

Tesla has posted two consecutive years of declining deliveries for the first time in its history. Analysts have slashed their forecasts for deliveries in 2026, with some also warning of a third straight annual drop.

Smaller rival Rivian Automotive RIVN.O delivered more vehicles than analysts expected in the first quarter, a sign demand has stabilized for its SUVs and R1T pickup trucks.

While Europe weighed on Tesla's global figures last year, the company has since showed signs of stabilization, gaining market share in key markets such as France in the first quarter of 2026.

The expiry of a $7,500 federal tax credit at the end of September dealt a blow to U.S. electric vehicle demand, stripping away a key incentive for the purchase of an EV.

Analysts expect the loss of the credit to hamper EV demand this year, adding to the headwinds Tesla already faces from rising competition.

The landscape in Europe has grown increasingly intense for Tesla, with legacy automakers and Chinese EV brands squeezing demand for a model lineup that has changed little in recent years.

Wall Street has increasingly looked past the quarterly delivery count, analysts have said, as Musk steers the company toward solar energy, humanoid robotics and autonomous taxis.

Tesla's valuation of $1.4 trillion rests heavily on its future ambitions, even as auto sales still remains the backbone of its revenue.

Tesla in June launched its robotaxi service in a limited capacity in Austin, Texas. Musk has said the company plans to rapidly expand the service in 2026, after removing safety monitors from vehicles in January.

Meanwhile, the production of the Cybercab, a purpose-built autonomous two-seater, is expected to ramp up through the year.

Tesla's robotaxi footprint remains modest, limited to Austin and a ride-hailing service in San Francisco, dwarfed by Waymo's broad commercial rollout across the U.S.