TLDR
- Tesla stock showed minimal movement after its robotaxi launch in Austin, rising less than $2 or 0.5% for the week
- Wall Street expects Tesla deliveries to drop 13-20% year-over-year when reported Wednesday, around 355,000-386,000 vehicles
- Consensus earnings estimates for 2025 and 2026 have been slashed by 25% and 16% respectively over the past three months
- Tesla faces pressure from potential elimination of EV tax credits under GOP spending bill currently in Senate
- Stock down 20% year-to-date while S&P 500 gained 5%, with Tesla losing market share across US, Europe, and China
Tesla’s highly anticipated robotaxi launch last week delivered something nobody expected: a collective shrug from Wall Street. The electric vehicle maker’s stock managed just a 0.5% gain following the debut of its autonomous ride-sharing service in Austin, Texas.
The muted reaction suggests investors remain focused on Tesla’s core business struggles rather than its futuristic promises. Shares opened Monday down 0.2% at $323.15 as traders brace for what’s expected to be another disappointing delivery report.
Tesla will report second-quarter deliveries on Wednesday, and the numbers won’t make for pleasant reading. Wall Street analysts expect around 386,000 vehicles delivered, down 13% from the same period last year.
Some estimates have turned even more pessimistic, with projections closer to 355,000 units. That would represent a 20% year-over-year decline and continue the downward trend that saw first-quarter deliveries fall 13%.
The delivery expectations have crashed from initial 2025 projections of around 500,000 vehicles for the quarter. Tesla’s aging vehicle lineup appears to be losing its appeal as high interest rates and political backlash weigh on demand.
Market Share Erosion Accelerates
Tesla’s problems extend beyond just delivery numbers. The company is hemorrhaging market share across its key regions despite overall electric vehicle sales growing robustly.
Through April, Tesla’s US market share dropped 9 percentage points while European share fell 8 points. Even in China, Tesla lost 3 percentage points of market share.
The losses sting particularly because global electric car sales jumped 38% through April, according to Morgan Stanley. Tesla appears to be missing out on industry-wide growth as competitors gain ground.
First-quarter results showed the depth of Tesla’s challenges. Automotive revenue fell 20% while non-GAAP net income dropped 40% year-over-year. Management blamed factory updates for the new Model Y Juniper, but production lines have since been refreshed with little improvement.
Wall Street has taken notice of Tesla’s struggles. Consensus earnings estimates for 2025 and 2026 have been cut by 25% and 16% respectively over the past three months.
Political Headwinds Mount
Tesla faces additional pressure from Washington as the Senate considers a GOP spending bill that would eliminate EV tax credits after September. The House version would end most credits by year-end.
CEO Elon Musk called the Senate’s version “utterly insane and destructive” on social media platform X. He argued the legislation “gives handouts to industries of the past while severely damaging industries of the future.”
Many Tesla customers rely on these tax credits for electric vehicles, solar panels, and home battery systems. The company also benefits from battery-storage tax credits that could be at risk.
Musk’s political positioning has created challenges for the Tesla brand. His support for President Trump and role with the Department of Government Efficiency upset Democrats, while his recent criticism of Trump’s spending bill has angered Republicans.
The political drama comes as Tesla trades at 145 times adjusted earnings despite Wall Street expecting just 14% annual earnings growth through 2026. That creates a price-to-earnings-to-growth ratio above 10, well into overvalued territory.
Tesla’s robotaxi service launched with roughly a dozen vehicles in Austin, restricted to invited passengers only. While the debut attracted attention, reports of driving incidents during early operations highlighted the technology’s limitations.
I love how when walking up to a Tesla Robotaxi, the lights pulse so you know it’s your ride. Really nice touch pic.twitter.com/9YiVKwLzOv
— Zack (@BLKMDL3) June 28, 2025
The service uses Tesla’s camera-only approach rather than the expensive lidar and radar systems used by competitors like Waymo. This cost-efficient strategy could prove more scalable if Tesla can perfect the technology.
Analysts see massive potential in robotaxi services, with revenue projections ranging from $115 billion to $700 billion by 2040. However, those distant projections offer little comfort to investors dealing with current operational challenges.
Tesla’s next earnings report will arrive a few weeks after Wednesday’s delivery numbers. Wall Street expects earnings per share of 44 cents, down from 52 cents in the same quarter last year and well below initial 2025 projections of 85 cents.
The company has promised to release new models this year, with details remaining scarce. Tesla stock showed it can react positively to disappointment if paired with encouraging news, as happened after weak first-quarter results.
Second-quarter deliveries are expected around 355,000 to 386,000 vehicles, down 13-20% from 444,000 delivered in the second quarter of 2024.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
