Tesla's stock has taken a significant hit, losing over 50 percent of its value since reaching an all-time high of 488 dollars. On April 22, 2025, the electric vehicle giant is set to release its quarterly earnings report, and the anticipation is palpable. Analysts predict a challenging outlook, with estimates suggesting a revenue drop to around 21.8 billion US dollars, down from 27.2 billion in the previous quarter. The expected earnings per share are also set to decline to 0.43 dollars from 0.74 dollars, raising concerns among investors.
The first quarter of 2025 has proven to be particularly difficult for Tesla, as the company reported deliveries of only 336,681 vehicles, marking a 13 percent decrease compared to the same period last year. Production numbers have also fallen, dropping 16 percent to 362,000 vehicles, which is the weakest performance the company has seen in three years.
Adding to the woes, Tesla has faced operational challenges, particularly with the Model Y. The company was forced to halt deliveries in the United States due to the Environmental Protection Agency (EPA) not yet granting a range certification for the model. This setback has left many customers in limbo, further impacting Tesla's image. Additionally, the production of a more affordable version of the Model Y, internally referred to as E41, has been delayed by several months, with a new timeline suggesting a start in the third quarter of 2025 at the earliest.
Elon Musk's recent political involvement has also stirred controversy and placed additional strain on the brand. His support for former President Donald Trump and his role in the newly established Department of Government Efficiency (DOGE) have drawn criticism. Analysts like Daniel Ives from Wedbush Securities believe that this political polarization has cost Tesla about ten percent of its potential customer base.
In light of these challenges, Ives has lowered his price target for Tesla's stock by 43 percent, now setting it at 315 dollars. This marks a significant shift for Ives, who has historically been a strong advocate for the company. Other analysts have also adjusted their expectations, with Mickey Legg from Benchmark lowering his target from 475 to 350 dollars while maintaining a "Buy" rating. Legg believes that recent stock declines and revenue drops are overreactions given the company's long-term potential.
Despite the current turmoil, some analysts remain optimistic about Tesla's future. The company is expected to launch a new model in the second quarter, which could help boost sales. Furthermore, the anticipated rollout of the Robotaxi service in Austin this June is seen as a potential game-changer for the company.
However, the broader market environment remains challenging. Ongoing tensions between the United States and China, coupled with uncertainties surrounding the Federal Reserve's interest rate policy, have created a nervous atmosphere for investors. This has had a ripple effect on technology stocks, including Tesla's, making it difficult for the company to regain its footing.
Moreover, competition in the electric vehicle market is intensifying, particularly with announcements from companies like CATL in China, which have unveiled new battery technologies promising rapid charging times. This development poses a direct challenge to Tesla's market dominance.
As the quarterly report looms, investors are left grappling with the question: Is it time to buy, hold, or sell Tesla stock? The upcoming figures will likely play a crucial role in shaping market sentiment. If the results are as disappointing as some analysts fear, the stock could drop below the psychologically significant 200 euro mark, prompting further sell-offs.
In summary, Tesla is at a crossroads. The combination of declining sales, production issues, and political controversies has created a perfect storm for the company. While some analysts see potential for recovery, the current landscape is fraught with uncertainty. Investors must weigh the risks carefully before making any decisions regarding their positions in Tesla.
