Protests and boycotts have prompted many electric vehicle buyers to seek alternatives, raising questions about whether Tesla’s growth trajectory has stalled.
Tesla, identified by the ticker symbol TSLA, announced on Wednesday that it delivered slightly over 336,000 electric vehicles globally in the first quarter of 2025. This figure was significantly below the expectations of most Wall Street analysts.
This announcement came after a challenging quarter for Tesla, during which the company’s stock plummeted by 36%, marking its worst quarterly performance since 2022. The decline was influenced by protests and boycotts in the U.S. and Europe, leading potential buyers to consider options other than Tesla.
Although Tesla’s stock movements often seem disconnected from the company’s core performance, recent developments indicate a genuine downturn in its fundamentals.
In the first quarter, Tesla reported delivering 336,681 vehicles while producing 362,615, which is approximately 7.7% more than what was delivered. The delivery numbers were around 14% less than Wall Street’s predictions. Bloomberg’s analyst poll had anticipated deliveries exceeding 390,000, and earlier forecasts in January were even higher, predicting over 460,000 deliveries for the quarter.
Furthermore, first-quarter deliveries were down about 13% compared to the previous year and decreased by 32% from the fourth quarter of 2024.
Tesla’s delivery figures are divided into two categories: one for Model 3 and Model Y, and another for “other models,” which includes the older Models S and X, as well as the Cybertruck. Deliveries of Models 3 and Y declined by 12% year-over-year, while deliveries of “other models” dropped by 46% from the fourth quarter of 2024, indicating potential issues with the Cybertruck’s sales.
Tesla explained that production line changes for the Model Y to accommodate an updated version resulted in a temporary production halt during the first quarter. However, this does not fully account for the reduction in deliveries.
The decline in Tesla’s deliveries is likely linked to CEO Elon Musk’s involvement in political activities, which has not resonated well with potential EV buyers in the U.S. and Europe. In the first quarter, Tesla experienced a series of protests, boycotts, and acts of vandalism related to spending cuts instigated by Musk during President Donald Trump’s second term.
Musk’s comments on European politics have also affected Tesla’s market share in Europe. Data from EU-EVs.com reveals that Tesla’s share in the European EV market fell from 17.9% a year ago to 9.3% in the first quarter of 2024.
Despite these challenges, some investors remain optimistic about Tesla’s broader potential beyond electric vehicles, citing ventures into robotaxis and humanoid robots, though these areas have yet to deliver tangible products. These new business ventures face intense competition and similar political challenges impacting Tesla’s vehicle sales.
Additionally, Politico reported that Musk may soon reduce his governmental involvement to focus more on his business endeavors. This news was well-received by the market, reversing a more than 6% dip in share prices to a gain exceeding 5%.
However, there are concerns that Tesla is no longer in growth mode, particularly given its high valuation compared to other established automakers. Its price-to-sales ratio is significantly higher than that of legacy automakers like Ford and General Motors, and substantially exceeds that of other EV makers such as Rivian. Investors are advised to proceed with caution.
