Tesla Q1 Deliveries May Fall Well Short of Estimates, Deutsche Bank Warns and Slashes Target Price

Deutsche Bank believes Tesla's first-quarter deliveries could slow further, with analyst Edison Yu slashing his price target from $420 to $345 while maintaining a buy rating on the stock.

The revised target still reflects a 26% upside from Tesla's latest closing price. The EV giant has lost 32% this year amid protests against Elon Musk and rising competition from China.

Yu now expects Q1 deliveries to range between 340,000 and 350,000 units, well below the sell-side consensus of 378,000. This would mark an 11% year-over-year decline, a 30% drop from Q4, and the lowest level since Q3 2022. He also cautioned that Tesla's auto margins will likely come under increased pressure as a result.

Yu attributes the recent pressure on Tesla's stock to weaker auto sales, a broader decline in growth stocks like the "Magnificent 7," and lingering political and policy uncertainties.

"Tesla's trajectory has never been linear, and we wouldn't expect developments in robotaxi or humanoid AI to follow a straight path either," Yu noted. He also highlighted concerns over brand damage from Elon Musk's political activities, suggesting it could impact demand—a factor he plans to monitor closely.

On a more positive note, Tesla appears well-positioned to hedge against President Donald Trump's proposed 25% tariff on all foreign-made cars. While some Tesla models incorporate 20-25% Mexican-sourced content, Yu estimates the impact will be minimal under current tariff guidelines. Tesla primarily sources low value-add components from Mexico, with powertrains and electronic parts largely unaffected.