Tesla's June Surge: Aberration or New Normal? Why HSBC's Warnings Could Be Right

The electric vehicle (EV) revolution is roaring, but not all players are keeping pace. Tesla's Q2 2025 delivery numbers—384,000 vehicles—were a welcome reprieve for bulls, but HSBC's scathing report has investors asking: Is this a sustainable leap forward, or just a flash in the pan? Let's dive into the data to separate the signal from the noise.

The June Anomaly: Tax Pull-Forward or Structural Strength?

HSBC's key gripe is Tesla's June deliveries, which accounted for a record 47% of Q2 sales—far above the historical 41-44% range. The bank calls this a “difficult-to-explain sales bump,” arguing it's likely a temporary surge driven by buyers rushing to lock in tax incentives before potential policy changes. But Tesla insists this reflects organic growth. Who's right?

First, the math: Tesla's Q2 deliveries rose 14% from Q1 but fell 13% year-over-year. While Q1 was historically weak, the YoY decline underscores a deeper issue: global demand for Tesla's current models may be peaking. shows a plateauing trend, with growth now relying on price cuts and tax tailwinds.

The Tax Tailwind—and Its Limits

Tax incentives are a double-edged sword. HSBC argues that June's sales spike could reflect a “pull-forward” of demand, where buyers accelerate purchases to avoid higher costs under new policies. If true, this creates a “hollow victory”: Q3 could see a slump as demand normalizes.

But Tesla's U.S. sales rose 2% sequentially in Q2, while Asian markets stabilized after years of weakness. China, Tesla's largest battleground, saw June sales jump 16.1% month-over-month—but this followed eight months of declines. The question remains: Can Tesla sustain momentum in a market where BYD now outsells it 2-to-1?

Valuation: A 165 P/E Ratio in a World of Competition

HSBC's $120 price target—a 40% discount to Tesla's current price—hinges on its sky-high valuation. With a P/E of 165 (versus 23 for Ford and 28 for GM), Tesla's stock assumes perfection: flawless execution of its affordable model, Cybertruck ramp-up, and global market dominance.

But reality is messy. Tesla's energy storage division fell short of expectations, deploying just 9.6 GWh in Q2. Meanwhile, rivals like Rivian (backed by a $1B Volkswagen investment) are closing the gap. reveals a stark disconnect: Tesla's valuation demands growth that few companies in history have delivered.

Musk's Claims vs. the Cold, Hard Data

Elon Musk has repeatedly promised a “major rebound” in deliveries, citing robotaxis and a 2025 affordable model. But delays plague both: the affordable car's launch was pushed into 2026, and Cybertruck production remains sluggish.

Meanwhile, Tesla's legacy models—Model S/X—are crumbling. Deliveries fell 52% year-over-year, as buyers gravitate toward newer competitors like the Lucid Air. tells a grim story: Tesla's premium lineup is losing its luster.

The Bottom Line: Reduce or Hold?

HSBC's “Reduce” rating isn't just about delivery trends—it's about whether Tesla's stock can justify its valuation. At $1 trillion, Tesla's market cap is now 10% of the entire automotive industry. To justify this, it must dominate EVs, energy storage, and autonomous tech—while fending off BYD, Ford, and GM.

The risks are clear: Overcapacity in the EV market, fading tax tailwinds, and Musk's political liabilities (e.g., his ties to far-right groups) could derail momentum. Yet bulls argue Tesla's brand, scale, and innovation still hold long-term value.

Investment Stance:
- Reduce if: Tesla's Q3 deliveries fall below 350,000, or its energy storage division continues to disappoint.
- Hold if: The affordable model launches in 2026, Cybertruck production ramps, and U.S. tax credits extend.

At today's price, Tesla's stock is pricing in a near-perfect future. HSBC's $120 PT isn't a death knell—yet—but it's a stark reminder that even disruptors can stumble. For now, investors should heed the warning: This stock is a call option on perfection. And perfection is hard to come by.

Action Alert! If you own TSLA, consider scaling back here unless you're a long-term visionary. If you don't, wait for a clearer signal. The EV race is a marathon—and Tesla's lead is narrowing fast.