Tesla-Focused ETFs Sink as EV Maker's Deliveries Drop

Short Tesla ETFs jumped after the company said vehicle deliveries dropped 8% from the same period a year ago.

ETF.com
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Contributing Editor
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Reviewed by: etf.com Staff
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Edited by: Ron Day

Tesla-focused ETFs dropped after the electric vehicle manufacturing giant said first quarter deliveries plunged 8.5% from the same period a year ago, its first year-over-year decline since 2020, and widely missing Wall Street expectations.

Tesla Inc. shares fell about 5% in midday trading. So-called single-stock exchange-traded funds that seek to outpace Tesla fell even more, while those that bet on falling Tesla shares jumped. 

While Tesla produced more than 433,000 vehicles, it delivered only 387,000, the company said in a press release Tuesday, missing analysts' expectations. A Factset survey forecast 457,000 deliveries for the quarter. Compared with the previous quarter, deliveries sank about 20%. 

The Direxion Daily TSLA Bull 1.5X Shares (TSLL), which seeks to outpace Tesla shares by one-and-a-half times, dropped more than 10%. The Direxion Daily TSLA Bear 1X Shares (TSLS), which rises when Tesla falls, added 5%. Tesla shares were recently trading at about $165, off over 33% for the year. 

The company led by Elon Musk has been buffeted from growing competition in the EV market, particularly from Chinese manufacturer BYD. Ford and GM, among other manufacturers have also been developing electric vehicles. Meanwhile, sales of which have stalled over the past months as the market for early adopters gets saturated and manufacturers are yet to cultivate new buyers for the relatively costly cars, according to a recent report.

Tesla attributed decreased deliveries partly to shipping diversions caused by Houthi attacks in the Red Sea, and an arson attack on its Gigafactory Berlin that caused factory shutdowns. In addition, the Austin, Texas-based company blamed what it called "the early phase of the production ramp of its updated Model 3 at its Fremont, Calif. factory.

Major ETFs focused on EVs and related technologies were recently down with Global X Autonomous & Electric Vehicles ETF (DRIV) and iShares Global Clean Energy ETF (ICLN) both dropping more than a percentage point. First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN) and Invesco WilderHill Clean Energy ETF (PBW), which invest in companies involved in clean energy, fell more than 3% and 2%, respectively. 

In January, Tesla reported lackluster fourth quarter earnings that missed analysts' expectations. Revenue rose just 3%, and the company noted that increases in the volume of vehicles it produces "may be notable lower" than in the previous year. 

In its first quarter of 2023, Tesla produced 440,000 vehicles and delivered 422,000. It delivered 494,000 vehicles and delivered 484,000 in its fourth quarter of 2024.

James Rubin is a contributing editor for etf.com, where he produces the Morning Exchange and Weekly Exchange newsletters. A longtime financial writer, editor and book author, he formerly held positions as a news and markets editor for the Americas at CoinDesk, where he focussed on cryptocurrencies. 

He provided editorial guidance for a Wall Street Journal best-selling book on Bitcoin and oversaw a startup newsroom focused on digital financial assets. He has edited for TheStreet and Unchained, where he wrote daily news stories about the trial of fallen crypto entrepreneur Sam Bankman-Fried. His writing has also appeared in The Hollywood Reporter, Forbes.com, AdWeek, Bankrate, The Financial Brand and The Wall Street Journal. He has also written for Forbes Insights and the Economist Intelligence Unit, including papers presented at World Economic Forums in Davos and Mumbai. 

James is the co-author of The Urban Cyclist’s Survival Guide (Triumph Books) and has been interviewed about bike safety on a number of NPR affiliates. In a prior career, Rubin was a world-ranked tennis player, once competing in Wimbledon’s qualifying rounds. He speaks fluent German and is a graduate of the Columbia University Graduate School of Journalism and received his BA at Columbia University.