Tesla Inc (NASDAQ:TSLA) reported first first-quarter vehicle deliveries significantly below analyst expectations, sending shares of the electric vehicle maker almost 5% lower in early trade on Wednesday.
The shares later picked up on reports that boss Elon Musk might be leaving his role with the Trump administration's 'department of government efficiency'.
The company delivered 336,681 vehicles in Q1, below analyst forecasts of 360,000 and 390,000.
This marked a 13% year-over-year drop from 386,810 vehicles in Q1 2024, attributed by Tesla to changes in production lines for the new Model Y.
Wedbush analysts, who have an ‘outperform’ rating on Tesla, believe the delivery number was a disaster for Tesla bulls amid continued negativity around the Tesla brand.
“We are not going to look at these numbers with rose-colored glasses...they were a disaster on every metric,” they wrote. “The Street and us knew a bad 1Q was coming but this was even worse than expected.”
The analysts believe the quarter was an example of the damage CEO Elon Musk is causing Tesla due to his involvement with the Trump administration.
“The more political he gets with DOGE the more the brand suffers, there is no debate,” they wrote. “Musk needs to stop this political firestorm and balance being CEO of Tesla with DOGE.
“The future is so bright but this is a full-blown crisis Tesla is navigating now and its primarily self-inflicted.”
Wedbush concluded: “We remain firmly bullish on the long-term Tesla story but Musk needs to get his act together or else unfortunately darker times are ahead for Tesla.”
Shares of Tesla traded down 4.8% at $255 shortly after US markets opened, before rising into positive territory at $269 by late morning.
** Update: Adds price update **