Tesla Slammed By Lower Q1 Sales — Will The Pain Continue?

Tesla (TSLA) just reported its first-quarter sales, and the company missed analysts’ estimate for deliveries by nearly 14 percent. It was the lowest total number of deliveries since the second quarter of 2022 for the electric vehicle specialist — and more disappointment may be on the way. 

Tesla has faced significant backlash around the world as consumers opt not to buy its vehicles in reaction to CEO Elon Musk and his efforts to cut government programs as part of the Department of Governmental Efficiency (DOGE). 

While Tesla stock dropped by more than 50 percent from its December 2024 high to its March 2025 low, investors are now asking themselves whether the sales declines will continue. The stock is up more than 25 percent from its 2025 low, and even bounced higher when first-quarter deliveries were announced, suggesting the news was better than feared.

Will Tesla’s stock continue to decline?

Investors have at least some reasons to be bearish on Tesla and expect more of the same sales slump throughout the year. First, Tesla’s first-quarter sales in the U.S. may have been largely unaffected by Musk’s acts as part of DOGE during January, as the Trump administration was inaugurated late in the month. Still, reports from Europe were showing that sales were dropping there in January at staggering levels — down 60 percent in Germany, for example. (That was followed up by an even bigger thumping: down 76 percent in Germany during February.) 

March continued with bad news. Car registrations in major European countries fell in March, with dips in the double digits. In France, registrations were down almost 37 percent in March, while they declined almost 64 percent in Norway. While the absolute unit volume is not that high in individual European countries — France had fewer than 3,200 registrations in March — they do signal consumers’ displeasure with the current world’s richest man. 

Second, Musk’s involvement in DOGE may have permanently tarnished the brand, and further political actions may be costing him with would-be consumers, such as offering voters $1 million checks in a Wisconsin Supreme Court election. This tarnish may not soon be wiped away, even as Musk reportedly will be stepping away from DOGE. So Musk may be a huge liability for Tesla, and his massive pledge of shares means he could actually accelerate a decline in Tesla’s stock.

Third, Tesla stock may still be arguably overvalued, and analysts have been furiously dropping their price targets recently. At least 11 analysts lowered their price target on Tesla since the start of March (predictably, after the stock had already fallen). In comparison to other carmakers on typical measures, Tesla’s stock receives a huge premium. In fact, Tesla is worth the next nine carmakers combined, despite Musk’s notorious history of overpromising and underdelivering. 

Musk has been out cheerleading the stock in recent weeks, and even President Donald Trump was stumping for Tesla cars on the White House lawn. Musk has been urging employees to hold onto their Tesla stock. Meanwhile, Musk’s own brother has been selling millions of dollars in Tesla shares — some at much higher prices than the stock is fetching in the market these days. 

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