Tesla’s First Quarter Delivers Disappointing Results Amid Slumping Sales

Tesla (NASDAQ: TSLA) announced on Wednesday that it delivered just over 336,000 electric vehicles globally in the first quarter of 2025. This figure significantly missed the expectations set by Wall Street analysts.

The announcement followed a tough quarter where Tesla’s stock plunged 36%, marking its steepest quarterly decline since 2022. The drop was attributed to protests and boycotts in both the U.S. and Europe, which led potential EV buyers to consider other brands.

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Tesla’s recent stock movements may appear disconnected from the company’s fundamentals. However, those fundamentals seem to be deteriorating.

Image source: Tesla.

Sharp Decline in Tesla Deliveries with No Immediate Recovery in Sight

Tesla reported delivering 336,681 vehicles in the first quarter, while the company produced 362,615 vehicles—about 7.7% more than what was delivered. This delivery total fell approximately 14% short of Wall Street predictions, as analysts surveyed by Bloomberg had anticipated deliveries exceeding 390,000. Earlier in January, forecasts suggested first-quarter deliveries could exceed 460,000, according to Bloomberg.

Additionally, first-quarter deliveries were down about 13% from the same period last year and plummeted 32% from the fourth quarter of 2024.

Tesla categorizes its delivery figures into two segments: Models 3 and Y, and “other models”, which include the older Models S and X as well as the Cybertruck. Deliveries for Models 3 and Y declined by 12% year-over-year. Moreover, deliveries of “other models” dropped by 46% compared to the fourth quarter of 2024. This significant reduction hints at possible stagnation in the sales of the Cybertruck, which has faced scrutiny.

In a concise statement, Tesla explained that the switch to producing an updated version of the Model Y caused “the loss of several weeks of production in Q1.” This could partially account for the 16.3% decrease in vehicle production compared to the first quarter of 2024, though it does not fully clarify the decline in deliveries.

Market Challenges Tied to Elon Musk’s Actions

CEO Elon Musk’s engagement in politics has undoubtedly affected potential buyers in the U.S. and Europe. In the first quarter, Tesla experienced waves of protests, boycotts, and instances of vandalism directed at its vehicles and facilities. These actions were rooted in Musk’s enforced spending cuts as part of President Trump’s administration.

Musk’s remarks regarding European politics have further complicated matters. In fact, Tesla’s market share for electric vehicles in 15 European countries dropped from 17.9% a year ago to just 9.3% in the first quarter of 2024, according to data from EU-EVs.com.

Despite these challenges, there may still be reasons to consider owning Tesla. Enthusiasts argue that Benz to the company extends beyond electric vehicles, encompassing ventures like robotaxis and humanoid robots. So far, however, these promises have not yielded tangible products. Both new initiatives are likely to face fierce competition and the same political hurdles impacting Tesla’s car sales.

On a more positive note, Politico reported that Musk could reduce his political engagement and focus more on his businesses. Market reaction to this news was favorable, with Tesla’s stock rebounding from a decline of over 6% to a rise of more than 5%.

Nonetheless, for the time being, it appears that Tesla is not in a growth phase. This situation raises concerns, especially considering the company’s high valuation compared to other established automakers. Its price-to-sales ratio exceeds ten times that of legacy manufacturers Ford and General Motors, and is approximately four times that of fellow EV producer Rivian.

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John Rosevear has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool also recommends General Motors. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.