Tesla plummets 7%! Growth concerns intensify, Wall Street expects Q1 delivery volume to hit the worst performance since Q4 2022

Due to the intense competition in the electric vehicle market and the "anti-Tesla" wave triggered by DOGE in the European and American markets, Tesla's Q1 delivery volume is expected to record its worst performance since Q4 2022.

According to updated forecasts from 15 analysts at Visible Alpha over the past 30 days, Tesla is expected to deliver approximately 373,000 vehicles in the first quarter, a year-on-year decrease of 3.6%. Tesla will announce its latest delivery data on Wednesday local time.

Some investors and analysts believe that even this updated average estimate may be overly optimistic. Thomas Martin, senior portfolio manager at Tesla shareholder Globalt Investments, stated, “I think the number will be below 400,000, and may even be as low as 350,000.” Deutsche Bank expects deliveries to be between 340,000 and 350,000 vehicles.

Currently, data estimated from automotive associations and analysts show a significant decline in Tesla's sales in the U.S., European, and Chinese markets over the first two months of this year.

On Monday, at the beginning of U.S. stock trading, Tesla's stock price plummeted by 7%, halving from its highest price since last year's election.

Amidst the sluggish sales, Musk admitted that his role in DOGE has come at a great cost, especially to Tesla's performance. Despite the decline in stock prices, Musk remains optimistic. He stated:

“In the long run, I believe Tesla's stock will do very well, perhaps now is a buying opportunity.”

Political Polarization and Brand Value Collapse

Analysis indicates that Musk's role as an advisor to Trump in assisting to cut federal spending has angered a large portion of Tesla's liberal consumer base. Data shows that Tesla owners are replacing their vehicles at record levels.

The situation has even escalated to violence: in Las Vegas, Tesla cars were set on fire; incidents of vandalism at Tesla stores have surged. Trump has stated that violent acts against Tesla dealerships will be labeled as domestic terrorism.

In response, Ken Mahoney, CEO of Mahoney Asset Management, stated:

We have seen Tesla's brand severely deteriorate globally. This brand has become more politicized than any public company's brand.

Intensified Competition in China and Declining Sales in Europe

In the key Chinese market, Tesla's vehicle sales have declined. BYD has launched at least six models in the past year to compete with the Model Y In Europe, sales declined in the first two months of this year, with people feeling repulsed by Musk's support for right-wing politics. Protests against "Tesla's collapse" have expanded in countries including Germany and Finland, amplifying criticism of Musk in the U.S., where he has played a significant role in pushing for cuts to federal staff and the termination of humanitarian programs.

Although Tesla may be less affected by Trump's latest 25% tariffs on imported cars and parts than its competitors (all cars sold by Tesla in the U.S. are produced domestically, and the parts imported from outside the U.S. are fewer than those of other automakers), Musk stated that the cost impact of the tariffs would not be negligible. Tesla also warned that the company faces the risk of retaliatory tariffs that could be imposed in response to Trump's tariffs.

Aging Product Line and Intense Competition

In addition to the economic downturn suppressing people's desire to purchase big-ticket items, demand for Tesla cars has also been affected by some potential customers waiting for the updated version of the Model Y.

Tesla began selling the updated Model Y in China last month and is launching it this month in the U.S. and Europe. The new Model Y features full-width front and rear lights, a rear touchscreen, and improved interior.

David Wagner, stock and portfolio manager at Aptus Capital Advisors, stated:

The updated Model Y may boost demand, but this could take some time, as many customers may be waiting for the launch of more affordable models.

Tesla has stated that it will launch a more affordable model based on the existing platform this year, but has not provided details.

Additionally, demand for the Cybertruck pickup, set to launch at the end of 2023, has also been tepid, with its polarizing trapezoidal design and price tag exceeding commitments deterring buyers. Quality issues have plagued this model, and this month Tesla recalled nearly all Cybertrucks in the U.S. to fix external panels that could fall off while driving