Tesla's stock falls as delivery report suggests the company is 'actively sacrificing' EVs

By William Gavin

Elon Musk's company reported vehicle sales and energy-storage deployments that were well below Wall Street's expectations

Elon Musk's Tesla will report earnings on April 22.

Tesla missed the mark on Thursday, with its first-quarter delivery report showing that the company sold fewer electric vehicles than expected and and also made fewer energy-storage deployments.

The carmaker said it delivered 358,023 EVs in the first quarter of 2025, well below the FactSet consensus that called for about 381,000 units. The performance also came in below a Tesla-compiled consensus of sell-side analyst estimates, which it said called for 365,645 units sold.

On the bright side for Tesla (TSLA), the company did deliver 6% more cars than it did in the first quarter of 2025. However, that period last year was an unusually weak quarter for Tesla, which was overhauling some production lines and dealing with protests over CEO Elon Musk's political involvement.

See: Why Tesla isn't getting a boost from high gas prices

Tesla in the first quarter also deployed just 8.8 gigawatt hours of energy-storage products, almost 39% below sell-side analysts' expectations. That weakness comes after two straight quarters of growth and marks the energy business's worst three-month period for deployments since the third quarter of 2024, when Tesla deployed 6.9 GWh.

Tesla shares fell 5.4% on Thursday, adding to the stock's decline in recent months. The stock is down nearly 20% year to date as of Thursday's close.

Although investors are focused on major plans involving artificial intelligence, such as robotaxis and humanoid robots, those projects are in the early stages and aren't generating significant revenue yet.

Electric vehicles generated $69.5 billion in revenue for Tesla last year, more than double what the rest of Tesla's business segments generated, despite car sales falling 10%. The energy and service-oriented business segments each generated more than $12 billion in revenue and logged strong growth in 2025.

William Blair's Jed Dorsheimer said in a note to clients Thursday that he wasn't surprised by the delivery report, given that Tesla is "actively sacrificing" its EV business in favor of autonomous technologies. It was the energy business's weakness that raised his eyebrows.

"This business can be lumpy and swing depending on customer grid hook-up timing, but that does not fully explain this drop-off," Dorsheimer said, adding that he was "confused" because the demand environment for energy solutions, including Tesla's Megapack battery solutions, doesn't appear to have changed.

Read: 'Do you believe in Elon?': Musk tests Tesla investors' faith with an expensive chip-making plan

Demonstrating growth in its current businesses will be important for Tesla, which has a number of expensive plans in the works. The company has projected capital expenditures of at least $20 billion this year, excluding costs associated with a massive and likely expensive chipmaking project.

Tesla said Thursday that it produced 394,611 Model Y SUVs and Model 3 sedans and sold 341,893 of those cars in the quarter. Collectively for the Model S, Model X and Cybertruck vehicles, Tesla produced 13,775 units and sold 16,130.

Musk this week said Tesla would stop taking custom orders for new Model S and Model X EVs as it prepares to retire those models by the end of the current quarter. That will likely have a relatively small, but still noticeable, impact on sales.

Tesla will report first-quarter earnings on April 22 after the market closes.

-William Gavin

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04-02-26 1834ET