The stock price of Tesla Inc is experiencing a significant slump, with a potential 50% drop from its all-time high reached in December. This decline is attributed to weaker than expected demand in regions like Europe. According to Goldman Sachs analyst Mark Delaney, the demand trends for electric vehicles are broad, but lower demand in Europe will lead to lower delivery estimates for Tesla.
Analyst Takeaways
- Broad demand trends for electric vehicles and lower demand in Europe will impact Tesla’s delivery estimates
- Earnings growth will improve over the longer-term due to software revenue like FSD
- Lower deliveries in the first quarter are likely the result of the Model Y transition and overall weaker demand
- Deliveries are expected to be stronger in March with the refreshed Model Y ramp
Delivery Estimates
The analyst has lowered the first quarter delivery estimate from 399,000 units to 375,000 units based on new data, including a 40% year-over-year decline in Europe in January. For the full fiscal year, the delivery estimate has been reduced from 1.96 million to 1.91 million.
Challenges in China
Tesla is expected to face tougher competition in China, where rivals are releasing similar software without requiring consumers to purchase an additional package. This could make it harder for the company to monetize FSD in the country.
Stock Price Action
Tesla stock is currently trading at $271.61, down 28.4% year-to-date in 2025. The stock price has dropped significantly from its all-time high and is nearing a 50% decline.
Key Points
- Tesla stock is down 28.4% year-to-date in 2025
- The stock price is nearing a 50% decline from its all-time high
- Weaker demand in Europe and challenging competition in China are major concerns for the company
- Software revenue like FSD is expected to drive earnings growth over the longer-term
Conclusion
Tesla is facing challenging times ahead, with weaker demand in Europe and tougher competition in China. While the company’s earnings growth is expected to improve over the longer-term, the current stock price decline is a significant concern for investors.