Tesla (TSLA0.00%) delivered slightly more than 336,000 electric vehicles between January and March, far below Wall Street’s already low expectations
The Austin, Texas-based automaker was expected to sell some 390,000 units, according to estimates. The quarter marks Tesla’s worst sales performance since the second quarter of 2022, when the company sold 254,695 units. That’s also tens of thousands of units below Tesla’s sales in the first quarter of 2024, when Tesla delivered 386,1810 units and reported weak earnings.
The sales figures shed some cold water on Tesla’s earlier forecast for 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.
Several analysts had already lowered their expectations for first-quarter sales as domestic protests against Tesla have raged and international sales slumped. For example, Deutsche Bank (DB+0.80%) had cut its first-quarter forecast by about 50,000 units to 345,000 deliveries and lowered its full-year estimate to 1.7 million units sold from 2.1 million units.
“The main drivers of the downside are weakness in Europe and the Model Y Juniper changeover,” Deutsche Bank analysts led by Edison Yu said in a recent note.
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. In several countries, including France, the Netherlands, and Norway, deliveries continued that decline in March.
Part of that decline is likely caused by Tesla’s push to replace its best-selling Model Y with a refreshed version.
Tesla’s factories making the Model Y had to halt some production to shift to making the refreshed SUV. In China, where Tesla assembles some Model Y cars and has been pressured by local automakers, new vehicle registrations hit almost 21,000 last week, Tesla’s most throughout the first quarter.
Tesla sold 323,800 Model 3 and Model Y EVs last quarter, along with just 12,881 units of the Model S, Model X, and Cybertruck. The automaker made 345,454 Model 3 and Model Y units, along with 17,161 units of the other models.
The company’s sales were likely impacted by the mass protests launched across U.S., Canada, and Europe against the company and CEO Elon Musk, who has taken a major role in President Donald Trump’s administration. Acts of vandalism against Tesla facilities and vehicles have become more frequent.
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. Some investors think that support will boost Tesla’s appeal to buyers who are more skeptical of EVs.
How much of Tesla’s quarter was really impacted by politics is difficult to quantify, as several analysts have noted. That’s likely to be a partial focus of Tesla’s earnings call, scheduled for the end of the month, along with the U.S.’ new tariffs on vehicles and vehicle parts.
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 in January 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.
“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,” Wedbush Securities analyst Dan Ives said in a Monday note.
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