Tesla (TSLA-4.22%) investors should brace themselves for first-quarter sales that fail to impress, analysts say, as the backlash over Elon Musk’s politics and his role in mass layoffs take a toll on the company.
Analysts on average expect Tesla on Wednesday to report deliveries of 408,000 electric vehicles for the January to March quarter, according to estimates compiled by FactSet (FDS+0.33%). Several analysts have downgraded their expectations to below 400,000 in recent weeks, as domestic protests against Tesla have raged and international sales slumped.
Deutsche Bank (DB-1.30%) analysts last week reduced its first-quarter forecast by about 50,000 units to 345,000 deliveries, which would translate to an 11% year-over-year drop and a 30% decrease from the previous quarter. Deutsche also lowered its full-year estimate to 1.7 million units sold from 2.1 million units, a 5% decline compared to 2024.
Tesla has forecasted a “return to growth” in 2025 after narrowly missing its 2024 sales goal and recording its first annual sales decline. In October, Musk forecasted sales growth of 30% for 2025.
“The main drivers of the downside are weakness in Europe and the Model Y Juniper changeover,” analysts led by Edison Yu said, referring to Tesla’s updated electric SUV.
Tesla’s sales in the European Union fell 49% in January and February compared to a year earlier, according to the European Automobile Manufacturer’s Association, with just 19,000 units registered. JATO Dynamics found that registrations of Tesla’s best-selling Model Y and Model 3 fell by 65% and 14%, respectively, in February.
In China, where domestic automakers including BYD (BYDDY-3.03%) and Xiaomi (XIACF-1.79%) are growing their share of the market and electrified-vehicle sales are soaring, Tesla’s sales fell 49% year-over-year in February. The firm sold 30,688 vehicles, its lowest monthly figure since July 2022.
Tesla has struggled to launch its advanced driver assistance technology in China, even as BYD plans to attach its “God’s Eye” software to just about all vehicles it sells. Some Chinese automakers are also able to sell their cars for dirt cheap.
In the U.S., RBC Capital Markets (RY+0.07%) thinks Tesla will report 152,000 vehicles sold, according to a March 27 note. Analysts expect to see sales slammed by the recent string of protests against Tesla, which organizers view as an extension of Musk and his influence.
Thousands have joined the “Takedown Tesla” demonstrations organized to protest Musk’s Department of Government Efficiency, while critical owners of Tesla stock — and other investors fearing a crash — have been selling their shares. Acts of vandalism against Tesla facilities and vehicles have become more frequent, even pushing Tesla out of a major Canadian auto show whose organizers were worried about backlash.
Forty-seven percent of voters surveyed by NBC News (CMCSA-0.34%) earlier this month had a negative view of DOGE, while 51% had a negative view of Musk himself. DOGE, however, was more popular, with 46% calling it a good idea and 40% saying it was bad.
Telsa shares hit a record price of $479.86 at its post-election fueled peak on Dec. 17, but most of those gains have since been wiped out. The stock has fallen by more than 34% year-to-date, sending Musk’s net worth down $102 billion to $330 billion. Shares are down almost 6% in intraday trading on Monday.
“We struggle to think of anything analogous in the history of the automotive industry, in which a brand has lost so much value so quickly,” JPMorgan (JPM-0.20%) analysts recently wrote of DOGE’s impact on Tesla.
But it’s still unclear how much that brand damage — which began with Musk’s support of Trump during the 2024 election — will impact sales. Deutsche analysts, for example, noted that they believe “there is some level of brand damage” happening in Western Europe and “pockets” of the U.S. and Canada, but quantifying it is trickier to tell.
Musk’s years-long shift toward the right wing had already irritated some potential customers with opposing views. In EV-friendly California, traditionally Tesla’s biggest domestic market, sales have dropped for five straight quarters. Just 13% of Democrats would consider buying a Tesla, according to a February Morning Consult poll.
Conservatives, meanwhile, have embraced Musk; Trump has bought himself a Model S and his administration has promised to treat people vandalizing Tesla facilities as domestic terrorists. It’s still unclear how their support will translate into sales.
Tesla will report its sales on Wednesday just hours before Trump’s planned 25% tariffs on vehicle imports will go into effect. The tariff will be extended to impact imported auto parts no later than May 3. That will affect just about every major automaker selling cars in the U.S., including Tesla, and may negatively impact sales.
Musk has said the cost impact of the tariffs will not be “trivial” and that Tesla won’t be left unscathed. CFO Vaibhav Taneja said on a January earnings call that the tariffs will hit the company’s business and profitability.
In a recent letter to the U.S. Trade Representative (USTR), Tesla said that even with “aggressive” localization of the supply chain, some parts are “difficult or impossible” to source domestically. Between 60% and 75% of the parts used in Tesla’s electric vehicles are made in the U.S., although that varies by model.
“[I]t is becoming crystal clear this tariff/U.S. policy will cause pure chaos to the global auto industry and will raise the prices of a typical car to a US consumer by $5k to $10k out of the gates,” Wedbush Securities analyst Dan Ives said in a Monday note.
“The winner in our view from this tariff is no one….as even Tesla still is clearly hit from these tariffs and will be forced to raise prices,” Ives, a major Tesla bull, added.
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