Tesla Inc. (NASDAQ: TSLA) finds itself under renewed pressure as UBS slashed its price target from $290 to $225, maintaining its “Sell” rating on the stock. The move comes amid concerns over weaker-than-expected Q1 2025 deliveries, with analysts pointing to sluggish sales momentum and margin erosion as key risks for the EV giant.
UBS Lowers Tesla Q1 Delivery Projections
UBS now projects Tesla’s Q1 2025 deliveries at 367,000 units, a sharp decline from their previous estimate of 437,000 units. This downward revision follows a disappointing Q4 2024 performance and persistent concerns over demand softness. Analysts at the bank noted that while Tesla could see a last-minute boost in deliveries from promotional efforts, current sales trends remain underwhelming.
Revenue Growth Slows, Margins Under Pressure
Beyond delivery shortfalls, UBS analysts flagged Tesla’s revenue growth stagnation, which stood at a mere 0.95% over the past 12 months. The company’s gross margin has also tumbled from 18.1% a year ago to an estimated 10.3% in Q1 2025. This steep margin compression highlights the financial strain Tesla faces as it grapples with pricing adjustments, cost inflation, and intensifying global competition.
Protests Add to Tesla’s Market Challenges
Adding to Tesla’s woes, several large markets witnessed anti-Tesla and anti-Dogecoin (DOGE) protests over the weekend. While details on these demonstrations remain sparse, any sustained negative sentiment toward Tesla or its association with DOGE could further weigh on investor confidence and customer sentiment.
What’s Next for Tesla?
With growing uncertainty surrounding Tesla’s near-term demand outlook, investors will be closely watching upcoming delivery data and any potential strategic pivots by CEO Elon Musk. As the EV landscape evolves, Tesla faces mounting pressure to sustain its market dominance while navigating headwinds in both consumer demand and financial performance.
