Tesla Faces Dim Outlook as Analysts Cut Delivery Estimates Ahead of Q2 Report

Analysts are bracing for disappointing second-quarter delivery results from Tesla this week, continuing a trend of lowered expectations for the electric vehicle giant. With delivery figures set to be released on Wednesday, market experts anticipate the numbers will fall short of earlier projections, driven by ongoing headwinds that have weighed on the company for several quarters.

‍

According to FactSet data, Tesla is expected to report approximately 387,000 vehicle deliveries for the second quarter. However, many analysts have already revised their estimates lower, citing persistent issues that have kept the company from meeting prior targets.

‍

Tesla’s delivery challenges are not new. The company has faced multiple obstacles, including political controversies involving CEO Elon Musk, temporary shutdowns at key manufacturing plants, and intensifying competition—particularly from fast-growing Chinese rivals like BYD, Li Auto, Nio, and Geely. These pressures have taken a toll on Tesla’s sales and stock performance.

‍

The stock took another hit on Tuesday, dropping as much as 7.7% during early trading after former President Donald Trump reignited his feud with Musk. In a social media post, Trump suggested that the Department of Government Efficiency should examine federal subsidies given to Musk’s businesses.

‍

The remark came shortly after Musk again criticized Trump’s tax-and-spending plans, adding to a political saga that investors view as a potential reputational risk for Tesla.

‍

Despite these challenges, one area has sparked optimism: Tesla’s recent push into Full Self Driving (FSD), highlighted by the launch of its Robotaxi service in Austin, Texas. This move into autonomous ride-hailing is being viewed by analysts as a promising strategic shift. Benchmark Equity Research, for instance, raised its price target on Tesla shares to $475, about 50% higher than the stock’s closing price on Monday.

‍

Here’s a look at what several major Wall Street firms are saying ahead of Tesla’s quarterly report:

Deutsche Bank
The firm expects Tesla’s Q2 deliveries to fall short of Wall Street consensus. It now forecasts 355,000 deliveries, down from a previous estimate of 385,000, and below the broader forecast of 380,000+. That would mark a year-over-year decline of nearly 20%, though a slight sequential improvement. The most significant drop is expected in Europe, where brand damage and stronger competition continue to weigh on sales. Deutsche also noted that Tesla’s anticipated Model Q unveiling, once expected in late June, appears delayed, with any potential volume benefits likely pushed to the fourth quarter.

‍

William Blair
William Blair echoed Deutsche’s lowered expectations, cutting its delivery forecast to 355,000 units. The firm highlighted Tesla’s evolving valuation story, noting that its robotaxi business is becoming increasingly central to its long-term outlook. The successful Austin launch marks Tesla’s transition from a car manufacturer to a leader in AI and autonomous vehicles, potentially opening a trillion-dollar addressable market. Despite near-term obstacles, the firm maintained an Outperform rating, citing the robotaxi launch as a positive catalyst.

‍

Barclays
Barclays remains cautious on Tesla, pointing out that both vehicle volume and profit margins are under pressure. The firm noted that Tesla’s earnings per share (EPS) projections have been revised downward by about 40% over the past year. While the company’s pivot toward AI and autonomy is becoming more prominent, Barclays believes the auto business will remain Tesla’s core revenue generator in the near term. The robotaxi rollout, though notable, is seen as a high-risk venture. The broader EV market, especially outside China, continues to face what Barclays describes as a prolonged “EV winter,” with global deliveries expected to decline for a second consecutive year.

‍

Canaccord Genuity
Canaccord lowered its Q2 delivery estimate significantly, from about 432,500 to 360,000. The firm noted that CEO Elon Musk’s political affiliations, which were difficult to measure earlier in the year, are now clearly affecting demand, particularly in Europe. Canaccord expects upcoming vehicle refreshes, especially for the Model Y, along with continued interest in robotaxis, could help support results later in the year.

‍

Cantor Fitzgerald
Cantor pointed to the recent departure of Omead Afshar, a key Tesla executive overseeing sales and production in North America and Europe, as another concerning development. Afshar played a pivotal role in scaling operations at the Texas Gigafactory and managing strategic projects. With his exit, Tesla loses a key player during a time when sales are already slipping due to stronger competition—especially from Chinese automakers—and negative consumer reactions to Musk’s political involvement.

‍

JPMorgan
JPMorgan is projecting an even steeper year-over-year decline in deliveries, estimating a 19% drop from 444,000 vehicles a year ago to about 360,000 for Q2. That would represent an 8% shortfall compared to Bloomberg’s consensus estimate of 392,000. The firm warned that Tesla’s outlook for full-year deliveries is at risk unless the company can dramatically reverse recent underperformance, a difficult task considering likely cuts to EV subsidies in the near future.

‍

As Tesla prepares to release its latest delivery numbers, the mood among analysts remains largely cautious. While the robotaxi initiative offers a glimpse into a potentially transformative future, near-term challenges continue to weigh heavily on expectations. Investors and analysts alike will be closely watching Wednesday’s results to see if Tesla can begin to turn the tide.

‍