TSLA Tumbles, Then Rebounds, After Disastrous Q1 Sales
Tesla shares were whipsawed Wednesday after the company reported first-quarter vehicle deliveries that were significantly worse than expected.
Tesla Inc. (TSLA) shares whipsawed on Wednesday after the company reported first-quarter vehicle deliveries that were significantly worse than expected.
The electric-vehicle maker said it delivered 336,681 vehicles during the first quarter, well below the 380,000 analysts expected. The result marks a 13% year-over-year decline and the lowest quarterly tally in nearly three years.
Still, at least on Wednesday, some investors are betting that the worst is behind the company. After initially falling as much as 6.4%, the stock rebounded to a gain of over 5% as of midday.
The Direxion Daily TSLA Bull 2X Shares (TSLL)—a popular leveraged Tesla ETF—moved even more dramatically, reflecting Tesla’s swings in double time.
Losing Its Edge
It’s a stunning fall for a company that, as recently as October, had CEO Elon Musk predicting a 30% rebound in sales in 2025. In 2024, Tesla posted a 1.1% decline in sales—its first annual drop ever.
In recent months, Tesla’s fortunes have dimmed significantly. Musk’s increasingly public alignment with President Donald Trump has damaged the brand and turned off potential buyers in key customer segments.
In Europe, Tesla sales have plummeted amid backlash to Trump’s trade war and Musk’s involvement in European politics. And even in the U.S., consumers who once gravitated toward the efficiency of Teslas have begun to shun the brand.
TSLA Bulls Make Their Case
Some of the bounce may have come from technical traders. Tesla’s intraday low of $251 was well above its recent $222 low from March. Holding above key levels often triggers buying from traders watching chart patterns.
Others are taking a more fundamental view, arguing the bad news is already priced in. From its all-time high above $480 in December, Tesla dropped as much as 55%. Even after Wednesday’s rally, the stock remains more than 40% off its peak.
Bulls also argue that the car business is no longer the main story. Tesla’s ambitions in robotaxis and humanoid robots have taken center stage, with Musk saying the company will start offering driverless taxi rides in Austin, Texas, this summer.
Still, skeptics warn that this might just be a "dead-cat bounce." Tesla is trading at more than 90 times forward earnings, and critics argue that no amount of sci-fi promise can justify that multiple if the core EV business deteriorates rapidly.
Time will tell which view is right. But for now, investors are split between believers in the bold future Musk is selling and skeptics who see a company losing its edge.
