Tesla faces turbulence as deliveries disappoint and tariffs hit
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Tesla stock endured a volatile trading session, initially reacting to underwhelming Q1 delivery figures, rallying briefly on unconfirmed rumors about Elon Musk’s distancing from political distractions, and then falling sharply after U.S. President Donald Trump’s sweeping tariff announcement. The stock dropped over 8% in after-hours trading to $260.10, tracking broader equity weakness with S&P 500 and Dow Jones futures also down 3% and 2.2%, respectively.
First-quarter deliveries came in at 336,681 units, missing consensus by more than 10% and falling 13% year-on-year—marking the steepest quarterly decline in Tesla’s history. Analysts attributed the miss partly to production interruptions from the Model Y update, but concerns are rising that Musk’s polarizing public persona may be eroding brand equity. While Baird’s Ben Kallo and CFRA’s Garrett Nelson acknowledged these challenges, the latter maintained a long-term bullish stance, projecting a sales rebound in Q2. Canaccord’s George Gianarikas offered a more cautious take, noting the brand impact remains uncertain.
Investor focus temporarily shifted to political developments when reports surfaced suggesting Musk might disengage from DOGE-related commentary. Although the White House dismissed these claims, the market responded positively, with Tesla shares rebounding intraday to close 5.3% higher at $282.76 before reversing in the post-market session.
Trump’s tariff policy, however, quickly reasserted itself as the dominant narrative. The announcement included punitive tariffs of 34% on Chinese imports and 32% on goods from Taiwan—levels that Wedbush’s Dan Ives described as “worse than the worst-case scenario.” Apple, Alphabet, and Amazon.com each declined sharply in after-hours trade, underscoring the broad-based impact across the tech sector.
Tariffs are expected to raise input costs for automakers, with Bank of America estimating U.S. auto sales could fall by up to 3 million units as higher prices suppress consumer demand. Tesla, despite plans to launch a lower-cost model and initiate a robotaxi service in Austin, Texas, is not immune. Deutsche Bank’s Edison Yu sees the new modelrolling out gradually, starting in the U.S., followed by Europe and China. Still, his full-year delivery forecast of 1.7 million units for 2025 represents a 5% decline from 2024’s 1.8 million.
With the upcoming earnings call scheduled for April 22, investors will be watching closely for clarity on vehicle volumes, tariff headwinds,and strategic updates on the robotaxi timeline. As uncertainty around macro policy and leadership continues to swirl, Tesla’s ability to stabilize operational execution and communicate a clear growth roadmap will be central to restoring investor confidence.
First-quarter deliveries came in at 336,681 units, missing consensus by more than 10% and falling 13% year-on-year—marking the steepest quarterly decline in Tesla’s history. Analysts attributed the miss partly to production interruptions from the Model Y update, but concerns are rising that Musk’s polarizing public persona may be eroding brand equity. While Baird’s Ben Kallo and CFRA’s Garrett Nelson acknowledged these challenges, the latter maintained a long-term bullish stance, projecting a sales rebound in Q2. Canaccord’s George Gianarikas offered a more cautious take, noting the brand impact remains uncertain.
Investor focus temporarily shifted to political developments when reports surfaced suggesting Musk might disengage from DOGE-related commentary. Although the White House dismissed these claims, the market responded positively, with Tesla shares rebounding intraday to close 5.3% higher at $282.76 before reversing in the post-market session.
Trump’s tariff policy, however, quickly reasserted itself as the dominant narrative. The announcement included punitive tariffs of 34% on Chinese imports and 32% on goods from Taiwan—levels that Wedbush’s Dan Ives described as “worse than the worst-case scenario.” Apple, Alphabet, and Amazon.com each declined sharply in after-hours trade, underscoring the broad-based impact across the tech sector.
Tariffs are expected to raise input costs for automakers, with Bank of America estimating U.S. auto sales could fall by up to 3 million units as higher prices suppress consumer demand. Tesla, despite plans to launch a lower-cost model and initiate a robotaxi service in Austin, Texas, is not immune. Deutsche Bank’s Edison Yu sees the new modelrolling out gradually, starting in the U.S., followed by Europe and China. Still, his full-year delivery forecast of 1.7 million units for 2025 represents a 5% decline from 2024’s 1.8 million.
With the upcoming earnings call scheduled for April 22, investors will be watching closely for clarity on vehicle volumes, tariff headwinds,and strategic updates on the robotaxi timeline. As uncertainty around macro policy and leadership continues to swirl, Tesla’s ability to stabilize operational execution and communicate a clear growth roadmap will be central to restoring investor confidence.