Tesla Faces 18% Year-Over-Year Delivery Decline in Q2 2025, UBS Warns

UBS has maintained its "sell" rating on Tesla, Inc. (TSLA.US), with a target price set at $215 per share. The investment bank expects Tesla to announce its second-quarter delivery data for 2025 on July 2. According to UBS, the delivery volume for the second quarter is projected to be approximately 366,000 units, representing an 18% year-over-year decrease and a 9% quarter-over-quarter increase. This projection suggests that the market may be disappointed with the delivery figures, as the anticipated decline could indicate challenges in Tesla's production and supply chain management.

UBS anticipates that Tesla's delivery volumes in the United States will see a quarter-over-quarter increase, while deliveries in Europe are expected to remain stable. However, deliveries in China may experience a decline. Based on discussions with investors, UBS estimates that Tesla's second-quarter delivery volume will range between 355,000 and 375,000 units. Additionally, UBS predicts that Tesla will report energy storage deployment data of 11.3GWh, marking an 8% quarter-over-quarter increase, but slightly below the market's expectation of 11.8GWh. UBS cautions investors about the volatility in energy storage project deployments.

UBS notes that while investors are focusing on Tesla's autonomous driving initiatives, such as the "robotaxi," many bullish investors may overlook the electric vehicle delivery data. They believe that Tesla's stock value lies in its artificial intelligence advancements, including robotaxis and humanoid robots. However, UBS emphasizes that Tesla's current financial performance is heavily reliant on its automotive business. This business not only funds its cutting-edge initiatives but also supports the high valuation of its artificial intelligence options, despite limited supporting data.

UBS warns that a disappointing delivery report could serve as a reality check for the market. Historical data shows that missed delivery targets often lead to a decline in Tesla's stock price. However, the previous quarter's unusual performance, where the stock price rose 5% despite a delivery shortfall of 11%, is a cause for concern. This anomaly suggests that Tesla may be entering a phase where its automotive fundamentals are less critical to its stock performance.

UBS also points out that the stock price volatility caused by delivery figures may be short-lived, with the upcoming earnings report being the more significant event. Although Tesla's second-quarter earnings report is not expected to be optimistic, CEO Elon Musk may use the earnings call to paint an ambitious vision for the company's future.