Tesla Faces Turbulent Waters as Delivery Numbers Set to Plunge Amid Leadership Shakeup and Political Backlash

Tesla is poised to release its quarterly delivery figures on Wednesday morning, and analysts broadly anticipate a second consecutive quarter of year-over-year declines, with delivery numbers forecasted to drop sharply by double digits. According to Visible Alpha, the company's second-quarter deliveries are expected to fall slightly below 400,000 units, marking a 10% decrease from over 440,000 units reported in the same period last year. Meanwhile, production is projected to increase from 410,831 vehicles in the previous year to approximately 434,200 units.

The demand for Tesla vehicles in key markets such as the U.S. and Europe has been affected this year, partly due to the company's CEO Elon Musk facing political backlash for his ties with the Trump administration. The first-quarter delivery numbers already came in significantly below expectations, signaling potential challenges for Tesla in the near term.

In the days leading up to the new delivery data release, media outlets reported that Omead Afshar, a key executive responsible for Tesla's sales and manufacturing in North America and Europe, has resigned, adding to the recent exodus of high-ranking figures within the company.

Some analysts believe Tesla's second-quarter could represent a low point for deliveries, anticipating a potential rebound later in the year. Deepwater Asset Management analysts noted in a recent report that brand recognition improvements were among the factors that might drive this recovery. However, issues such as the awaited affordable model that CEO Musk promised earlier this year may have led some consumers to delay their purchasing decisions, affecting current sales figures.

The Canadian Royal Bank of Capital Markets forecasted deliveries at around 366,000 units, which is below market consensus, citing consumer hesitation as they await the new model. Meanwhile, analysts from Baird highlighted the significance of delivery numbers as a fundamental metric but acknowledged that short-term market excitement might focus more on new initiatives like robotaxis. There is skepticism about whether the promised affordable model will launch on schedule.

Remarkably, in Europe, Tesla's sales have dropped for five consecutive months, with May figures showing a decline to 13,863 vehicles, a 27.9% reduction year-on-year in the European Union, UK, and EFTA countries. Despite Elon Musk starting to downplay his role in American politics, the brand's image in Europe has yet to see noticeable improvement. Musk continues to bet on autonomous taxis and AI as pivotal for Tesla's future revenue streams.