Tesla Abandons Growth Targets After Earnings Disaster
Tesla has abandoned its ambitious long-term growth forecast following a shocking first-quarter earnings report that saw profits plummet 71% year-over-year. The electric vehicle maker, which once projected 50% annual growth and aspired to sell 20 million vehicles annually by the end of the decade, now faces a dramatically altered reality as it reported just $409 million in profits for the quarter, down from $1.4 billion in the same period last year.
The company cited “uncertainty in the automotive and energy markets” and “rapidly evolving trade policy” that “adversely impacts the global supply chain and cost structure” as key factors behind its decision to withdraw guidance. Tesla indicated it will revisit its 2025 projections in its second-quarter financial update, a significant departure from its previously unwavering confidence in achieving industry-leading growth rates.
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From Astronomical Growth to Alarming Retreat
Tesla’s revised outlook represents a stark reversal for a company that once positioned itself as the inevitable dominant force in the automotive industry’s electric future. According to The New York Times, the company previously aimed to sell 20 million vehicles annually by the end of the decade—twice Toyota’s current global volume—but those ambitions now appear increasingly unrealistic as sales have begun sliding from their peak of 1.8 million in 2023.
The numbers tell a sobering story: Tesla delivered just 336,681 vehicles in the first quarter, well below analyst expectations of 390,342 and representing a 13% year-over-year decline. This marks the company’s worst quarterly delivery performance since Q2 2022 and suggests fundamental challenges beyond temporary market fluctuations.
Revenue followed a similar downward trajectory, falling to $19.34 billion compared to analyst expectations of $21.43 billion and below even the $21.3 billion reported in the same quarter last year. The financial results fell dramatically short across multiple metrics, with earnings per share of just $0.12 versus analyst estimates of $0.33.
Analysts Forecast Further Deterioration
Wall Street has responded to Tesla’s declining performance with increasingly pessimistic projections. According to Business Insider, Deutsche Bank now expects Tesla to deliver approximately 1.7 million vehicles this year, representing a 5% year-over-year decline, while warning that the weakness in vehicle sales is spreading across geographical regions rather than being isolated to specific markets.
Wells Fargo issued an even more bearish outlook, suggesting Tesla is on track to deliver just 1.35 million vehicles in 2025 based on annualized first-quarter figures—27% below consensus estimates. The bank highlighted concerning demand indicators including the introduction of 0% financing on Model Y vehicles in China and shortened delivery times in key U.S. markets.
“In the US, the new Model Y is available in 2-4 weeks in New York & immediately available in LA, indicating another sign of softening demand,” Wells Fargo noted. The bank maintained its “Underweight” rating with a $130 price target, suggesting significant additional downside from Tesla’s current trading level.
JPMorgan similarly reduced its estimates following the weak delivery results, stating that “the trend in Tesla sales is worse than we and the market had appreciated.” The bank now projects Tesla will sell about 1.7 million vehicles in 2025 and earn $2.30 per share for the full year, well below previous consensus estimates.
Product Pipeline Claims Meet Market Skepticism
Despite the dismal financial results, Tesla maintained its commitment to launching new affordable vehicles in the first half of 2025 and reaffirmed plans for robotaxi volume production beginning in 2026. According to Yahoo Finance, these assertions directly contradict recent reports suggesting delays in the company’s product roadmap.
Market skepticism about these timelines remains high, however, particularly given Tesla’s history of missed deadlines for new products. The long-awaited Cybertruck, for example, faced multiple delays before its eventual launch, and the company has now reportedly scaled back production as demand appears weaker than initially projected.
The feasibility of Tesla’s product promises also faces new challenges from President Trump’s implementation of 25% tariffs on foreign automotive imports, which the company specifically referenced as creating supply chain and cost structure complications. This evolving trade landscape potentially impacts not only Tesla’s current vehicle lineup but also its ability to develop and launch new models at competitive price points.
As investor focus shifts to Tesla’s upcoming “live company update” following the earnings release, questions mount about whether CEO Elon Musk will address calls to step back from his government role and refocus on Tesla’s core business. With the stock down approximately 41% year-to-date, the abandonment of growth targets may represent just the beginning of a fundamental reassessment of Tesla’s future prospects and valuation.
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