Tesla (NASDAQ:TSLA) investors have had a terrible start to 2025, with the stock down a whopping 30%. But with Elon Musk recently telling employees to hang on to their stock, is now the time for me to take advantage of its slide and buy some for my ISA portfolio?
Q1 deliveries
On Wednesday (April 2), Tesla released its production and deliveries report for Q1 and they didn’t make for pleasant reading. Global deliveries fell 13% from the same time last year to 336,681.
For me, these numbers are a disaster and highlight that something is fundamentally not right at the company. Only last year, Musk had been forecasting 25%-30% growth in sales in 2025, on the back of its new Cybertruck. The reality has been a model dogged with safety concerns, which recently led to a complete recall of the model.
In Germany, home to its European operations, registered sales slumped in 2024 to less than 38,000. The country’s Federal Motor Transport Authority has similarly reported a weak start to 2025, with registrations down over 70% compared with a year ago.
Brand image
What these falling sales figures highlight, is that political leanings of Musk have tarnished the brand’s image.
Last month, in an all-hands call, he had this to say about the stock. “Tesla stock goes up and it goes down, but it’s actually still the same company. It’s just people’s perception of the future, I don’t know, I guess it’s very emotional.”
I would agree that Tesla does invoke significant emotions these days. In both the Europe and the US its sites have become vandalism targets and owners’ cars set on fire.
But it also faces stiff competition from Chinese EV maker BYD. That recently became the first EV maker to report sales in excess of $100bn. In addition, it’s also getting squeezed in the lower end of the market. The Renault Twingo is set to be launched with a price tag of €20,000.
Beyond EVs
In the early days of the motor car in the 20th century it looked like a few global players would rule the roost. It didn’t turn out like that and I don’t think the EV market will either. For starters, the differing adoption rates across the globe are turning into a major headache for the big boys.
Ultimately, Musk doesn’t see Tesla’s future as a pureplay EV manufacturer but more as a player in AI and robotics. As such the company is behaving more like it was 15 years ago, a speculative play in nascent, experimentation technologies. This brings additional risks but also the opportunity for big returns.
The promise of self-driving cars has so far disappointed, with hype not matching reality. But Musk believes that the research into this technology provides it with a competitive advantage as it seeks to mass produce Optimus, its human-like robot.
The company’s charismatic CEO believes the opportunity here is the biggest in history and has the potential to provide Tesla with a $30trn valuation. But in the short-term a global trade war is what matters here. With so much uncertainty, I won’t be buying.
