MW Tesla's deliveries 'disaster' is a warning for Elon Musk: Focus on EVs, or else.

By Tomi Kilgore

Deliveries dropped to the lowest number in nearly three years - at a time when some key rivals are seeing growth

Tesla Inc. reported first-quarter deliveries that were even worse than Wall Street feared, but the electric-vehicle giant's stock managed to seesaw into the green Wednesday, as the damage may have already been done.

Tesla's $(TSLA)$ weak performance comes at a time when some of its key rivals are seeing strong growth. That effectively confirms the brand destruction, due in part to Chief Executive Elon Musk's high-profile position in the Trump administration, that investors been so worried about.

Wedbush analyst Dan Ives, who has a Street-high stock-price target of $550, said the results show there is now "no debate" - the weakness is about a lot more than some production hiccups, and the "brand crisis issues" are clearly having a negative impact on demand.

"We're not going to look at these numbers with rose-colored glasses. ... They were a disaster on every metric," Ives wrote in a note to clients.

As Ives put it, the more political Musk gets as head of the entity known as the Department of Government Efficiency, or DOGE, the more the Tesla brand suffers.

Musk needs to "get his act together, or else unfortunately, darker times are ahead for Tesla," he said.

The stock sank as much as 6.4% just after the opening bell Wednesday before staging a comeback. It was gaining 2.3% in midday trading.

Wall Street has been expecting the worst from Tesla over the past several months. The stock tumbled 35.8% in the first quarter, the worst quarterly performance since it plunged 53.6% in the fourth quarter of 2022. It was now trading about 43% below its record closed of $479.86 on Dec. 17, 2024.

Tesla said it delivered more than 336,000 vehicles during the first quarter, down from 387,000 deliveries a year ago and the lowest total since the second quarter of 2022.

That was well below the average analyst estimate compiled by FactSet of 404,000 vehicles. It was also lower than the "whisper" number, or what Wall Street was quietly expecting, with even the most bullish analyst projecting a number in the 360,000 range.

Tesla indicated that one reason for the weak performance was that the changeover to refreshed Model Y production lines had led to several weeks of lost production. The company tried to inject some optimism by saying the ramp of the new Model Y "continues to go well."

While Tesla's EV deliveries dropped, rival Ford Motor Co. $(F)$ said on Tuesday that first-quarter sales of EVs rose 26%, while General Motors Co. $(GM)$ said EV sales soared 119%.

In China, Tesla's second-largest market, the Austin, Texas-based company saw first-quarter sales drop 22%. Meanwhile, overall sales of new-energy vehicles in China were up about 46% in the first quarter, as leader BYD Co. (BYDDY) saw sales jump 58%.

Also on Tuesday, data showed that Tesla's sales in France were down 41%, while sales in Sweden plunged 64%.

Wedbush's Ives said the numbers show that Musk "needs to stop this political firestorm" and balance being CEO of Tesla with his work with DOGE.

"The time has come for Musk. ... It's a fork in the road moment," Ives wrote.

-Tomi Kilgore

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April 02, 2025 11:53 ET (15:53 GMT)

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