Tesla is poised to report a 10% year-over-year drop in second-quarter vehicle deliveries, with analysts projecting around 400,000 units by June 2025, down from 440,000 last year, according to Visible Alpha estimates. The electric vehicle (EV) leader faces headwinds from consumer pushback against CEO Elon Musk’s political ties, but analysts supuestamente hint at a potential rebound, making this Wednesday’s delivery report a pivotal moment for the company.

Consumer Backlash Dents Demand

Demand for Tesla’s EVs has weakened in key markets like the U.S. and Europe, driven by controversy over Musk’s involvement with the Trump administration. This political backlash has eroded Tesla’s appeal among some buyers, contributing to a projected delivery decline. The company’s first-quarter performance already showed strain, falling short of expectations, and Q2 continues this trend. The departure of Omead Afshar, who led sales and manufacturing in North America and Europe, adds uncertainty, marking another high-profile exit amid Tesla’s challenges.

Production Surges Despite Sales Slump

Tesla’s factories are outpacing demand, with production expected to climb to 434,200 vehicles in Q2, up from 410,831 a year ago. This creates a growing inventory surplus, as deliveries lag behind output. The mismatch highlights operational hurdles, with Tesla needing to balance manufacturing efficiency against softening consumer interest. Stabilizing sales will be critical to clearing this backlog and maintaining financial momentum.

Hope for Recovery with New Models

Some analysts see Q2 as Tesla’s low point, with brighter prospects ahead. Deepwater Asset Management predicts a turnaround in the second half of 2025, stating, “We expect the second quarter could be the low point for Tesla’s delivery numbers, with a recovery likely in the second half of the year.”

They cite improving brand perception and anticipation for a more affordable EV model, expected in early 2025, as potential catalysts. However, RBC Capital Markets forecasts a lower 366,000 deliveries, suggesting some buyers may be delaying purchases until the new model arrives. Baird analysts note that Tesla’s robotaxi ambitions could shift investor focus, emphasizing that “the recent launch of robotaxi and excitement regarding this opportunity will likely take precedence in the near term.”

Stock Struggles and Competitive Pressures

Tesla’s stock has lost about 20% of its value in 2025, closing recently at $323, down from its December 2024 peak. Analyst sentiment is split, with Visible Alpha tracking 10 buy, 4 hold, and 4 sell ratings, and an average price target of $306. Intensifying competition from global EV makers and potential tariff hikes on imported components, which Musk has flagged as a concern, could further pressure margins. These factors add complexity to Tesla’s path forward.

Wednesday’s delivery numbers will test Tesla’s ability to navigate these challenges. While new models and autonomous driving initiatives offer growth potential, the company must address consumer sentiment and operational gaps to reclaim its momentum in a fiercely competitive EV landscape.

Photo copyright EVXL