TSLA Inc.

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Somewhat Bearish -25

Tesla stock slips below $400: why upbeat EV sales estimates are not helping

📉 TSLA shares fell 1.6% to $398.66 in early trading despite positive analyst forecasts for Q2 deliveries and margins.

🚗 Wolfe Research projects Q2 deliveries of ~420,000 units, exceeding the current Wall Street consensus of ~400,000.

💰 Automotive gross margins excluding regulatory credits are forecast at low-18%, up from 17.7% in Q1.

🤖 Investors remain focused on long-term autonomy initiatives like Robotaxi and Humanoids rather than near-term vehicle sales.

⏳ Analysts warn that Robotaxi deployment timelines are slipping with shallower ramp curves than previously expected.

🚕 Competition is intensifying as Waymo expands to 20 cities this year and Mobileye targets 100 robotaxis by 2027.

🇳🇱 Dutch regulators approved FSD (Supervised) for 40,000 vehicles after 3,000 hours of testing with no serious incidents.

📊 The system has collectively traveled 24 million kilometers under strict monitoring since April approval.

🔗 Market assumes a potential TSLA/SPCX merger could provide downside support, though likely not until mid-2027.

Bullish Signals
  • Analysts project Q2 deliveries of approximately 420,000 vehicles, which is roughly 10% above the year-earlier period and ahead of current Wall Street consensus estimates.
  • Automotive gross margins excluding regulatory credits are forecast to be in the low-18% range, representing an improvement over the 17.7% recorded in Q1.
  • Dutch regulators approved Full Self-Driving (Supervised) software for 40,000 vehicles following 3,000 hours of testing across varying weather conditions.
  • The Dutch road authority reported that the approved fleet has collectively traveled 24 million kilometers without any serious incidents.
  • Provisional approvals based on the Dutch decision have been granted in Belgium, Denmark, Estonia, and Lithuania.
Risk Factors
  • Wolfe Research warns that deployment timelines for Robotaxi are slower than expected, with ramp curves shallower than previously anticipated.
  • Analysts suggest investors are discounting Tesla's stock because they believe the market is paying for autonomy progress that is arriving later than hoped.
  • Intensifying competition from established players like Waymo and Mobileye could reduce Tesla's lead in near-term autonomous deployment and data flywheels.
  • Tesla's FSD system remains classified as a driver-assistance system requiring drivers to keep attention on the road and be prepared to intervene at any time.
Full Analysis
Tesla (TSLA) shares slipped below $400 in early trading, falling 1.6% to $398.66, despite analysts projecting stronger-than-expected second-quarter results and positive data regarding Full Self-Driving adoption in Europe. Wolfe Research forecasts Q2 deliveries of approximately 420,000 vehicles, roughly 10% above the prior year and ahead of Wall Street consensus, with automotive gross margins excluding regulatory credits projected in the low-18% range. Despite constructive near-term fundamentals, analysts argue that Tesla's valuation is primarily driven by long-term execution on autonomous driving, robotics, and AI services rather than current vehicle sales. Wolfe Research warns that deployment timelines for the Robotaxi are slipping with shallower ramp curves than expected, causing investors to discount the stock based on delayed autonomy progress despite upbeat delivery estimates. The article highlights intensifying competition in the autonomous sector, noting Waymo's expansion into 20 cities this year and Mobileye's deployment goals. Additionally, Dutch regulators approved Tesla's Full Self-Driving (Supervised) software for 40,000 vehicles after 3,000 hours of testing, reporting 24 million kilometers traveled without serious incidents, though the system remains classified as driver-assistance requiring active monitoring.