Tesla: First-Quarter Deliveries Decline, Driving Shares Lower
Seth Goldstein, CFA - 2 April, 2025 | 4:08PM
Morningstar’s Metrics for Tesla
Tesla TSLA reported first-quarter deliveries of 336,681 vehicles, which came in below guidance and were down 13% versus the first quarter of 2024. Shares were down 2% at the time of writing on the news.
Why it matters: Falling first-quarter auto sales make it difficult for the company to achieve management’s guidance of deliveries growth in 2025. A similar dynamic occurred in 2024, where annual deliveries fell to start to the year and were not offset by growth in the second half.
Lower deliveries also reduce Tesla’s total addressable market for its ancillary products and services. These include autonomous vehicle subscription software, charging, and insurance in a growing number of US states.
The bottom line: We maintain our $250 per share fair value estimate for narrow-moat Tesla. The decline was in line with our predictions for the cadence of the year. We forecast deliveries will decline in 2025 for the second straight year.
At current prices, we view Tesla shares as fairly valued, with the stock trading just above our fair value estimate and in 3-star territory. We recommend investors wait for the stock to offer a margin of safety before considering an entry point.
We see deliveries improving through the rest of 2025, as Tesla launched the refreshed Model Y in March and plans to release an affordable vehicle later in the year. These new models should drive deliveries growth in the second half of the year.
Coming up: Tesla plans to report first-quarter earnings on April 22, following the market close. We hope management will provide the latest timeline for the launch of the affordable vehicle. We also hope to hear an update on Tesla’s planned robotaxi testing in Austin, Texas, and in California.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.