Tesla Inc. (NASDAQ: TSLA) has reported one of its weakest quarters since 2022, delivering just 336,681 vehicles in Q1 2025 a steep 13% drop from the 386,810 units delivered in the same period a year earlier.
The shortfall came in well below Wall Street expectations and just two days after Tesla wrapped up its worst quarterly performance in over two years, shedding 36% over the first three months of 2025. Interestingly, online search for the phrase ‘sell Tesla stock’ has surged to a one-year high—a sign of mounting concerns over the company’s outlook.
Forecasts ahead of the release painted a more optimistic picture. Prediction market platform Kalshi had projected 356,000 deliveries, while Bloomberg’s consensus estimate was even higher at 390,342, making the actual numbers a glaring miss that rattled investor confidence.
Tesla shares initially fell more than 2% in early trading on April 2 following the delivery report. However, the stock later rebounded, changing hands at $283 at the press time.
Factory upgrades and political backlash hit TSLA’s performance
Tesla attributed part of the production shortfall to the changeover of Model Y production lines across all four factories, which resulted in several weeks of lost output during Q1. However, factory slowdowns are only part of the story.
The company’s struggles go beyond production bottlenecks. The growing competition and shifting public perception of Elon Musk’s political ties also appear to be weighing on Tesla’s European sales. In Germany, protests over Musk’s alleged association with far-right groups have fueled concerns about Tesla’s reputation, potentially affecting consumer sentiment.
Tesla’s business in Europe has taken a major hit. Tesla’s EV market share across 15 European countries fell to 9.3% in Q1 2025, down from 17.9% a year ago. In Germany, Tesla’s market share in battery electric vehicles dropped precipitously to just 4%, down from 16%. France and Sweden also posted declines for the third straight month, with Tesla logging its worst Q1 sales figures in those countries since 2021.
In China—Tesla’s largest overseas market March sales rose to 78,828 vehicles, a rebound from February’s 30,688. However, the figure was still down 11.5% year-over-year, according to data from the China Passenger Car Association. Tesla continues to face stiff competition in the region from domestic EV giants like BYD, which are capturing greater market share with aggressive pricing and rapid model rollouts.
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