Struggling Tesla encounters its toughest period in several years.
2025's Where the Rubber Meets the Road for Tesla Stock
Tesla (WKN: A1CX3T) has been on a bumpy ride this year, and things aren't looking much brighter for investors. In the first quarter of 2025, the stock took a nosedive, shedding an alarming 36% of its value—the most significant drop since the end of 2022 and the third-worst crash on the stock market overall. On Thursday alone, the stock plummeted by almost four percent in pre-market trading, partly due to the disappointing delivery numbers from the company.
The Disappointing Delivery Numbers
In the first three months of the year, the electric car pioneer delivered 336,681 vehicles, with an output of 362,615 units. Analysts had anticipated significantly higher delivery numbers of 377,590. To add salt to the wound, the number dip is compared to the 386,810 deliveries in the same quarter last year. In China, one of the most crucial markets for automakers, sales slumped by 11.5 percent in March. Meanwhile, competitors like BYD aren't resting on their laurels.
Adding fuel to the fire, Tesla's image has been taking a beating due to various factors - not least real-world implications resulting from Elon Musk's political engagement. According to reports, Musk might soon bid farewell to his "side job" within the Trump administration. However, this won't be enough to salvage the stock, according to Swiss banking giant UBS.
UBS: Time to Unload Tesla Shares
With a price target of $225, UBS has kept its "Sell" rating on Tesla shares. In a note on Wednesday, analyst Joseph Spak pondered upon the missed delivery expectations in the first quarter. Tesla last sold fewer vehicles in the second quarter of 2022. Spak now sees the need for a correction in expectations for 2025 and likely the following years.
At quarterly results on April 22, Tesla is anticipated to focus on artificial intelligence, upcoming launches of more affordable models, the start of robotaxis in Austin, Texas in June, and humanoid robots. While there's definitely potential for a comeback, current price fantasies are heavily driven by promises. Those still holding on to the belief that the stock will make a swift recovery can find it in the Tech-Giant Index on BÖRSE ONLINE for diversified investing in the challenged tech sector.
Contains material from dpa-AFX
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In the context of Tesla's Q1 performance, it's crucial for investors to reconsider their holding of Tesla shares, as UBS has maintained a "Sell" rating and set a price target of $225, indicating potential for a correction in expectations. For those looking to diversify their investments in the challenging tech sector, the Tech-Giant Index on BÖRSE ONLINE can be an option.
