Tesla (TSLA) CEO Elon Musk has had quite an eventful 2025 so far.
From courtroom standoffs with the SEC to Grok’s AI misfires, his headlines have had little to do with electric vehicles lately.
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Throw in the social media brawls with President Trump, and it’s obvious that the billionaire’s bandwidth is stretching thin.
But while the world watches the noise, something else is shifting behind the scenes, and it has a lot more to do with Tesla’s fundamentals than its founder’s firestorms.
Another Tesla sales drop has investors bracing for more pain
Tesla’s 2025 started on the back foot, and things haven’t seemed to pick up much since.
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In Q1, Tesla delivered just over 336,000 vehicles globally, representing a drop of 13% year-over-year.
It blamed retooling for the refreshed Model Y, which led to multiple production weeks. But that wasn’t the only weakness.
Moreover, European sales continued their slide, with March registrations in the Netherlands falling close to 50% half compared to last year.
Even in Tesla-friendly California, Q1 registrations declined 15%, hinting at remarkable demand softness on home turf.
That sluggish momentum rolled into Q2.
Though Tesla produced more than 410,000 vehicles, it delivered just 384,000, a 13.5% year-over-year decline.
That marks the second consecutive annualized sales drop, leaving Tesla trailing well behind Mr.Market’s expectations.
Additionally, analysts are starting to signal something more than a temporary dip.
Moreover, with the global EV market maturing and Chinese rivals like BYD blowing ahead, sales are expected to grow by 45% this year.
And there’s more than just market dynamics at play.
Elon Musk’s political moves have also sparked a major backlash from consumers and dealers. In an industry where brand equity matters a ton, Musk’s growing baggage is tipping the scales for some buyers.
Now the pressure is on the second half of the year.
After missing on both Q1 and Q2 results, Tesla needs a serious rebound to hit full-year goals, which seems like a tall order at this point.
Top analyst slashes Tesla sales outlook as Q2 deliveries stumble
Andres Sheppard’s 13% trim to Tesla’s Q2 revenue forecast is a shot across the bow before earnings land.
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The Cantor Fitzgerald analyst discusses disappointing deliveries and soft energy revenue, lowering his estimates from $24.1 billion to about $21 billion.
That’s a major reset in investor expectations just a couple of days before Tesla opens the books.
Q2 deliveries came in at 384,122 units, down sequentially and from the prior year.
Still, he’s not turning bearish. Sheppard held firm on his Buy rating and a $355 price target, suggesting roughly an 8% upside from current levels. Why the optimism? It’s all about what’s coming next.
He expects Tesla will update its full-year outlook and, more importantly, offer a clearer timeline for its low-cost EV.
That model was teased early in 2025 but has seen few official updates. Investors will listen closely for more details, especially with CEO Elon Musk hyping the vehicle as a game-changer for global demand.
Moreover, Sheppard is bullish on Tesla’s Robotaxi ambitions.
He feels the autonomous ride-hailing business could become a future profit engine, a massive, high-margin, software-driven platform that could potentially scale fast and capture a major chunk of a fast-growing market.
With trade tensions and tariffs looming, the analyst says any signals about vehicle demand in the second half of 2025 will prove critical.
Overall, the revenue downgrade is likely to spook investors short term, but if Tesla delivers a clear roadmap on Robotaxis and affordable EVs, Wall Street could easily shift its gears on the EV giant.
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Great Job Moz Farooque & the Team @ TheStreet Source link for sharing this story.
