Tesla Faces Mounting Challenges as Delivery Report Looms
As demonstrations against Tesla and its CEO Elon Musk unfold in Seattle, the electric vehicle manufacturer braces for what analysts predict will be a challenging first-quarter delivery report next week. Industry experts anticipate underperformance in Tesla’s deliveries, citing weak sales and brand damage linked to Musk’s political involvement.
Wall Street has been adjusting its expectations downward, with analysts reducing sales forecasts and price targets for Tesla. Investor nervousness has grown amid concerns over weak demand, particularly in European and Chinese markets where Tesla sales have seen significant declines.
RBC Capital Markets analyst Tom Narayan forecasts lower-than-consensus deliveries, projecting a 19% drop in Europe and a 40%-45% drop in China. Narayan also anticipates demand delays due to the upcoming Model Y refresh and a new affordable model in the pipeline.
The impact of Tesla’s challenges extends beyond immediate sales figures. Deutsche Bank predicts a “major reset” of expectations for Tesla in 2025 and 2026, while maintaining a “buy” rating but lowering its price target. Similarly, HSBC has reduced its price target, indicating a potential significant drop from current levels.
Analysts point to brand damage from Musk’s political actions as a contributing factor to Tesla’s struggles. Recent protests and an increase in available used Teslas reflect growing public dissatisfaction. William Blair analysts note challenges arising from political backlash, supply changes, and increased competition in the EV market.
Wedbush Securities’ Dan Ives discusses the impact of Musk’s political involvement on Tesla, predicting a challenging delivery report but maintaining an optimistic long-term outlook. Ives emphasizes the potential for recovery in the second half of the year with new model releases.
Tesla’s stock has experienced a decline, reflecting these market concerns. Year-to-date, the company’s stock has fallen significantly, underscoring the challenges facing the electric vehicle pioneer as it navigates a complex landscape of market dynamics and public perception.
