Tesla’s Q1 Delivery Shortfall Raises Concerns Amid Market Challenges
Tesla’s Q1 Performance Not Meeting Expectations
Year-to-date, the Zacks Rank #3 (Hold) stock Tesla (TSLA) has decreased by 26%. Over the same period, shares have plummeted more than 40%. Factors influencing this downturn include political pushback, declining electric vehicle (EV) demand, tariff worries, and fierce rivalry from Chinese EV manufacturers such as BYD, Xpeng (XPEV), and Li Auto (LI). This morning, Tesla reported its awaited quarterly delivery data:
Total Q1 Deliveries: 336,681 (Consensus Estimates: 378k); -13% YoY
Model 3/Y Deliveries: 323,800 (Consensus Estimates: 351.9k); -12% YoY
Other Models + Cybertruck: 12,881; -46% QoQ
Total Q1 Production: 362,615
Could Tesla Be Approaching a Bottom?
A familiar saying on Wall Street is, “Sometimes when you try to call bottoms, all you end up with is stinky fingers.” For Tesla, investors are left wondering whether the company can rebound after a rocky beginning to the year. Here are five indicators that suggest Tesla may have reached its nadir:
1. General Market Conditions Have Declined: Stocks are affected by their broader market context. Historically, the first quarter of a post-election presidential cycle is among the weakest for stocks. Recent data indicated that stocks faced their first correction of 2025, disproportionately affecting those tied to the “Trump Trade,” including TSLA, the iShares Bitcoin ETF (IBIT), and Coinbase (COIN). Nevertheless, several indicators point to a potential market bottom on the horizon following Q1’s struggles.
Image Source: BTIG, Bloomberg
2. Sell the Rumor, Buy the News: The market tends to price in future expectations. Investors likely anticipated the disappointing delivery numbers ahead of time. Once the uninspiring news broke, it was too late for a negative reaction. Recently, TSLA shares demonstrated a shift, with the Nasdaq 100 Index ETF (QQQ) reaching a low on March 31st, while TSLA’s previously reached a low on March 11th and have since detached from that trend.
Image Source: Zacks Investment Research
3. Model Y Reconfiguration: One contributing factor to the underwhelming deliveries in Q1 was Tesla’s need to reconfigure its factories for the updated version of its Model Y SUV, the world’s best-selling vehicle.
4. Elon Musk’s Shift in Focus: Tesla faced declining performance as CEO Elon Musk diverted his attention to “The Department of Government Efficiency.” The Trump Administration confirmed Musk’s imminent resignation from DOGE. Analyst Dan Ives argues that Musk’s government involvement represents a $100 overhang on Tesla’s stock.
5. Growing Energy Business: While frequently overlooked, Tesla’s energy business continues to thrive. In Q1, the company deployed 10.4 GWh of energy storage, reflecting a robust 156% growth year-over-year.
Image Source: @sawyermerritt
6. Robotaxi Launch Imminent: Elon Musk has announced that the much-anticipated Tesla robotaxi will debut in Austin this June.
Bottom Line: Despite not meeting Q1 delivery projections, several factors indicate that negative expectations may already be reflected in Tesla’s stock price. With Elon Musk’s focus shifting away from DOGE, temporary Model Y production issues set to resolve, and robust growth in the energy sector, TSLA shares may gain momentum moving forward.
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This article originally published on Zacks Investment Research (zacks.com).
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
