Investing.com -- Tesla shares fell more than 4% early Wednesday after the company reported first-quarter vehicle deliveries that came in well below expectations. However, the electric vehicle giant's shares have since rebounded and are now up over 5% on the session. Some attribute the gain to a 'sell the rumor, buy the news' reaction to the delivery numbers.
In addition, the stock got a mid-day bump from a Politico article, which said that U.S. President Donald Trump has told his inner circle, including members of his Cabinet, that Elon Musk will be stepping back in the coming weeks. White House press secretary Karoline Leavitt later called the report "garbage", saying, "Elon Musk and President Trump have both *publicly* stated that Elon will depart from public service as a special government employee when his incredible work at DOGE is complete."
The electric vehicle maker delivered 336,681 vehicles in the first quarter of 2025, missing the Bloomberg print forecast of 390,000. Production totaled 362,615 units for the quarter.
Tesla (NASDAQ:TSLA) attributed the shortfall to manufacturing disruptions related to its Model Y refresh. “While the changeover of Model Y lines across all four of our factories led to the loss of several weeks of production in Q1, the ramp of the New Model Y continues to go well,” the company said in a press release.
Deliveries of the Model 3 and Model Y, which make up the bulk of Tesla’s sales, reached 323,800 units, while other models, including the Model S and Model X, accounted for 12,881 deliveries.
The weaker-than-expected numbers come as Tesla faces increasing backlash against CEO Elon Musk's politics, exacerbating weakening demand for the company’s vehicles.
The company will report full first-quarter financial results on April 22.
"Since expectations were extremely low for Q1, the 336.6K number isn’t shockingly bad, but it’s still pretty grim, especially since the main headwinds facing Tesla’s auto business remain in place: slumping demand in major markets (owing to heightened competition, consumer macro pressures, and Musk’s political activities), trade tensions (Tesla faces auto part tariff risks and retaliation exposure), and innovation," analysts at Vital Knowledge said in reaction to the report.
Analysts at Canaccord noted the weak deliveries but said they "don’t think this is the quarter where one can accurately assess any potential Tesla brand impact from recent events."
"We are not saying there hasn’t been any… but there is way too much going on to make a proper assessment as to how material it is — and — how permanent it will become," wrote the firm.
However, analysts at Wedbush took the opposite view, stating, "the brand crisis issues are clearly having a negative impact on Tesla...there is no debate."
"Musk needs to stop this political firestorm and balance being CEO of Tesla with DOGE," asserted the firm. "The future is so bright but this is a full blown crisis Tesla is navigating now and its primarily self-inflected. We remain firmly bullish on the long-term Tesla story but Musk needs to get his act together or else unfortunately darker times are ahead for Tesla."
(Sam Boughedda contributed to this article)
