Tesla’s Q1 Deliveries Miss the Mark, Stir Selloff and Brand Concerns Ahead of Tariff Decision

Tesla’s first-quarter vehicle delivery numbers landed with a thud Wednesday morning, coming in well below Wall Street’s already-lowered expectations and igniting renewed concerns about demand, brand damage, and CEO Elon Musk’s political entanglements. The EV maker reported Q1 deliveries of 336,681 vehicles—far shy of consensus estimates near 377,000 and dangerously close to worst-case whispers around 335,000. Shares of Tesla (TSLA) initially tumbled as much as 3% to $253 before staging a modest recovery ahead of President Trump’s highly anticipated 4:00 p.m. ET “Liberation Day” tariff announcement, which could reshape the auto landscape.

Deliveries declined 13% year over year, marking Tesla’s steepest drop in quarterly volumes since 2020. Production also fell to 362,615 vehicles, down 16% from a year ago and down 21% sequentially from Q4 2024. The quarter’s gap between production and deliveries—26,000 units—is notable for Tesla, suggesting lingering logistical or demand-side issues.

Tesla’s most popular vehicles, the Model 3 and Y, accounted for 323,800 deliveries, down 12% year over year. Deliveries of its higher-end vehicles—Model S, X, and Cybertruck—were a weak 12,881 units, down 46% quarter over quarter. The latter stat raised particular concern among analysts, as it signaled sharp weakness in Tesla’s premium segment. “Tesla’s numbers suck,” tweeted Gerber Kawasaki CEO Ross Gerber. “The brand is in serious decline and the board should be dumped immediately.”

Dan Ives of Wedbush Securities, one of Wall Street’s most vocal Tesla bulls, didn’t sugarcoat the results: “We are not going to look at these numbers with rose-colored glasses… they were a disaster on every metric.” In his Wednesday note, Ives called this a “fork in the road” moment for Tesla and Musk, warning that while the long-term opportunity in autonomy and FSD remains massive, the short-term damage is largely self-inflicted. “Musk needs to stop this political firestorm and balance being CEO of Tesla with DOGE,” he wrote, referring to Musk’s government post. Wedbush maintained its Outperform rating and $550 price target but urged corrective action.

Gene Munster of Deepwater Asset Management struck a more nuanced tone. “If $TSLA finishes the day down less than 5% on these ugly numbers, it will be a sobering moment for Tesla bears,” he tweeted. Still, Munster acknowledged downside revisions are inevitable, forecasting non-GAAP EPS of ~$2.00 for 2025, down from Street consensus of $2.74.

This latest delivery miss comes on the heels of months of deteriorating fundamentals abroad. Tesla’s market share in Europe fell from 17.9% to 9.3% in Q1, according to EU-EVs data. In Germany, a key growth market, BEV share collapsed to just 4%. Chinese deliveries in March dropped 11.5% year over year, with growing pressure from local players like BYD. And in North America, demand appears to have softened as Musk’s political activism, particularly his role in President Trump’s administration, has led to organized protests, boycotts, and even isolated acts of vandalism.

Tesla’s Q1 results follow its worst quarterly stock performance since 2022, with shares falling 36% YTD and wiping out more than $460 billion in market value. Coming into Wednesday, Tesla was the worst performer among the so-called “Magnificent Seven” tech leaders.

Technical traders are watching key levels: the stock rebounded off its 20-day moving average at $253, but the 200-day MA looms large at $287, now a major line of resistance. How Tesla trades from here may depend less on its own fundamentals and more on Trump’s tariff announcement this afternoon, which could have broad implications for the auto sector, particularly if foreign automakers face new duties.

Still, analysts agree that Q1’s weak numbers will weigh heavily on upcoming earnings, scheduled for April 22. “This will push analysts to reduce full-year 2025 delivery estimates and earnings,” noted Gary Black of Future Fund. Investors are now bracing for what is shaping up to be a very low bar on both revenue and profit metrics.

Longer-term, Musk is doubling down on Tesla’s bet that autonomy and AI will shift the narrative. A pilot program for an unsupervised robotaxi is set to launch in Austin this summer, and a lower-cost EV model is expected to debut later this year—though details remain sparse.

But for now, Tesla faces a credibility crisis, and its brand appears to be under siege globally. As Munster warned, the bulls may need to be patient: “Imagine what the stock could do when the numbers start to improve.” The problem is, right now, they're not.