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Tesla stock (NYSE: TSLA) is trading sharply lower today after the company reported a sharp fall in its Q1 deliveries. While there have been concerns over Tesla’s deliveries and many analysts lowered their forecast over the last month the final number even came in below the toned-down expectations.
Tesla produced 362,000 vehicles and delivered 332,000 of these in Q1 2025. For context, the US electric vehicle (EV) giant delivered 386,810 vehicles in the corresponding quarter last year.
Tesla Reports a Fall in Q1 Deliveries
At the beginning of the year, consensus estimates called for Tesla’s Q1 deliveries to rise 20% YoY to 464,000. However, analysts gradually lowered their forecasts after Tesla’s sales plummeted in China and Europe which are two of its key markets. Markets were expecting Tesla’s delivery numbers to come in around 372,400 but the company missed that estimate by a wide margin.
Tesla reported a YoY fall in its deliveries last year also which was the first time that its shipments fell on an annual basis. Incidentally the company managed to grow its deliveries in 2020 also even as the global automotive industry was rattled by the supply chain crisis emanating out of the COVID-19 pandemic.
In its Q4 2024 shareholder deck Tesla said, “With the advancements in vehicle autonomy and the introduction of new products, we expect the vehicle business to return to growth in 2025.” Notably, last year Musk Tesla’s CEO Elon Musk said that the company’s 2025 deliveries might rise by as mush as 30% as it prepares to launch new vehicles.
However, the company has had a tepid start to the year with deliveries plunging by double digits in the first quarter.
Tesla Saw a Decline in Shipments in China
While Tesla does not provide a quarterly breakdown by geographies, data released by the China Passenger Car Association (CPCA) showed that the company’s sales fell by 11.5% YoY in March. Previously, Tesla’s sales fell to a two-year low in China even as domestic Chinese companies reported stellar numbers.
Notably, in 2011 Tesla CEO Elon Musk laughed at the possibility of BYD becoming a competitor to Tesla. However, the Chinese company has proven critics wrong and offers EV models at quite competitive prices.
BYD’s annual revenues rose 29% YoY to $107 billion last year while Tesla’s revenues were around $97.7 billion. The steep rise in BYD’s sales was led by record 4.27 million deliveries which was well ahead of Tesla which reported a YoY fall in its 2024 deliveries – the first in the company’s history.
BYD has already beaten Tesla in terms of total deliveries and its Q1 battery electric vehicle shipments were also ahead of Tesla.
Musk Heads DOGE Under the Trump Administration
Musk is currently serving as a “special government employee” and heads the Department of Government Efficiency. The Tesla CEO is tasked with advising Trump on cutting excess government spending and has a 130-day time frame under federal law which would expire at the end of May unless it is extended again.
Musk has meanwhile hinted that he intends to leave his position at DOGE and in an interview with Fox News he said, “I think we will have accomplished most of the work required to reduce the deficit by a trillion dollars within that time frame.”
Trump also acknowledged Musk’s obligations towards his other companies and said, “I think he’s amazing but I also think he’s got a big company to run and so at some point he’s going to be going back.” He added, “He wants to. I’d keep him as long as I could keep him.”
Musk Admits That His Association with DOGE Is Hurting Tesla
Musk’s association with the Trump administration and his time commitments towards DOGE (Department of Government Efficiency) which he heads, has been making a section of the market apprehensive about the billionaire’s ability to devote adequate time at Tesla. Such concerns have been around for quite some time as apart from Tesla Musk also heads several other companies like SpaceX and Neuralink. Of late, he has added X and his artificial intelligence (AI) startup xAI to the ever-growing list of companies that he owns.
Even Musk has admitted that his stint with the Trump administration is hurting Tesla and at a town hall in Green Bay on Sunday he said, “This is a very expensive job, is what I’m saying.”
According to Musk, “What [the protesters are] trying to do is put massive pressure on me, and Tesla I guess, to you know, I don’t know, stop doing this.” He added, “My Tesla stock and the stock of everyone who holds Tesla has gone, went roughly in half. I mean it’s a big deal.”
The billionaire meanwhile emphasized, “Long term I think Tesla stock’s going to do fine, so maybe it’s a buying opportunity.”
Notably, Musk often makes big predictions about Tesla’s market cap. During the Q3 2022 earnings call, Musk predicted that Tesla’s market cap would one day surpass the combined market caps of Apple and Saudi Aramco. He reiterated similar views during the Q4 2022 earnings call and said, “long term, I am convinced that Tesla will be the most valuable company on earth.” Last year, Musk said that its Optimus humanoid would add $25 trillion to its market cap.
Musk is Known to Make Bold Predictions
To be sure, Musk is known to make bold predictions many of which don’t come to fruition. For instance, in 2021 Musk said that over the long term, Tesla’s deliveries would grow at a CAGR of 50% and expects the company to sell 20 million cars in 2030. To put that in perspective, that is almost twice what market leader Toyota sells annually.
However, the company has virtually withdrawn the 50% delivery CAGR guidance while officially removing the reference to 20 million deliveries from its 2023 impact report.
Musk had once predicted a million robotaxis by 2020. Cut to 2025, and the company expects to test its first robotaxis in Austin in June. The world’s richest person has made forecasts about Tesla achieving full autonomy multiple times but it’s a goal that still continues to evade the EV giant.
