Tesla (TSLA) is no longer confidently stating growth in its automotive business for 2025, and it has delayed updating its guidance until the next quarter after a disappointing performance in the first three months of the year.
2024 was Tesla’s first year in a decade where its vehicle deliveries went down year-over-year.
Just a few months ago, in January, Tesla was confident in predicting that it would return to growth in 2025:
“With the advancements in vehicle autonomy and the introduction of new products, we expect the vehicle business to return to growth in 2025.”
Today, Tesla released its Q1 2025 financial results, confirming that it had its worst quarter in years to start 2025.
The automaker is now clearly not as confident about returning to growth in its automotive business this year.
Tesla updated its “outlook” section this quarter to highlight the potential impact of trade policies and now no longer discusses automotive growth in isolation. Instead, it bundled automotive and energy businesses together and said that it will “revisit its 2025 guidance” next quarter:
It is difficult to measure the impacts of shifting global trade policy on the automotive and energy supply chains, our cost structure and demand for durable goods and related services. While we are making prudent investments that will set up both our vehicle and energy businesses for growth, the rate of growth this year will depend on a variety of factors, including the rate of acceleration of our autonomy efforts, production ramp at our factories and the broader macroeconomic environment. We will revisit our 2025 guidance in our Q2 update.
Tesla’s vehicle deliveries are already down about 50,000 units so far this year compared to last year.
It will be challenging to catch up in the current macroeconomic situation.
Tesla again guided the start of production of “new affordable models” in the first half of 2025, which could help the automaker to deliver more cars.
However, as we have previously reported, these new vehicles are expected to be stripped-down Model Y and Model 3, which will cannibalize Tesla’s current sales and limit its growth to those products.
Electrek’s Take
Tesla appears to be somewhat shaken following a challenging quarter. The company would have literally lost money if it hadn’t boosted its regulatory credit sales.
Tesla started the year down 50,000 units; it already doesn’t have a backlog for the new Model Y, and now we need to expect growth later this year, thanks to a stripped-down Model Y and improvement in autonomy?
You need to be a special kind of gullible to believe that.
However, there are many of those gullible people on Wall Street, and they completely miss what’s happening with Tesla. First, they thought Tesla would deliver 50,000 more vehicles this quarter. Even after being comforted with their mistakes in terms of deliveries, they still grossly overestimated Tesla’s earnings.
As of this morning, the Wall Street consensus remained that Tesla would grow its deliveries in 2025. I hope they wake up and it’s not the case tomorrow, but I doubt it.
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