New York CNN Business  — 

Tesla on Wednesday reported a massive drop in auto sales for last quarter, though the company said it’s confident it will still reach its annual sales goal.

The slowdown in deliveries does not come as a shock: Wall Street analysts expected Tesla to deliver about 50,000 Model 3s. And Tesla had already said it expected fewer Model S and Model X sales compared to a year earlier.

Tesla will report first quarter sales and production figures this week, and Wall Street analysts expect sales and deliveries of its best-selling car — the Model 3 — to be about 50,000, or significantly lower than the 63,000 reported last quarter.

Meanwhile, Tesla has said that deliveries of its more expensive Model S and Model X cars will be less than the 22,000 the company delivered a year earlier. All that means the company is likely to announce that it delivered notably less cars than the 90,700 it reported last quarter.

That’s still significantly more than what Tesla reported a year ago, when Model 3 production was just getting started. During that quarter, the company sold less than 30,000 vehicles. But Tesla sales have never fallen so much quarter-over-quarter.

A couple of circumstances are to blame for the decline.

First, Tesla rushed to complete some sales before the end of last year so buyers could take advantage of a $7,500 federal tax credit, which lowered the amount people had to pay for Tesla’s vehicles. That tax credit was cut in half — potentially making a Tesla a somewhat tougher sell for budget-conscious buyers.

Tesla (TSLA) responded by cutting prices by $2,000 per vehicle, making up for some of the lost tax credit. But the company said there was some “pull forward” of sales into the fourth quarter that would eat into first quarter results. And it said the sales of the Model S and Model X cars — which are pricier, more established models compared to the Model 3 — would be below what Tesla (TSLA) delivered a year earlier.

Second, the company started shipping its Model 3 to China and Europe for the first time in the first quarter.

The new push on international sales has been a logistical challenge for Tesla. The company said Wednesday that it encountered “many challenges” with a “massive increase” in shipments abroad, something the company has previously warned investors about.

CEO Elon Musk had said in January he was still “optimistic about being profitable in Q1.” But he admitted a month later that he expected a modest first quarter loss. By the middle of March, Musk was emailing employees and asking them to do whatever they could to deliver every car possible before the quarter closed.

“As challenges go, this is a good one to have, as we’ve built the cars and people have bought the cars,” he wrote in that email. “So we just need to get the cars to their new owners!”

All of that means this week’s report could reveal the first quarter-to-quarter drop in sales at Tesla in nearly two years — and what is likely to be its largest drop in sales by far.

News of slowing sales could also stir up new concerns about whether Tesla has enough cash to make its hefty debt payments.

In March, Tesla paid off a $920 million bond that took a big chunk out of the $3.7 billion in cash it had on hand at the start of the quarter. That followed a $230 million payment the company made in November.

Its next big payment is a $566 million debt issue that is due in November, followed by another $1.4 billion in notes that is due in two years.

Tesla also needs more cash soon, as it prepares to start making the Model Y — its cheaper SUV built on the Model 3 sedan platform. And Tesla is building a plant in Shanghai that it hopes will make half a million vehicles for the Chinese market every year.

Even so, the talk of a cash crunch has quieted down somewhat, at least compared to last year.

“From our standpoint we wouldn’t characterize Tesla as having a robust liquidity position by any means, but it’s less tenuous than it was six to nine months ago,” said Bruce Clark, credit analyst at Moody’s.

Correction: The initial version of this story gave an incorrect range of analyst estimates for the first quarter vehicle deliveries by Tesla.