Tesla Stock Drops 9%+ After Q1 Deliveries Drop to Three-Year Low

Tesla (Nasdaq: TSLA) is trading at $242.52 as of 1:04 PM EDT on April 4th, down 9.26%. The stock fell $24.76 after reporting weak Q1 2025 results. This came two days after Tesla closed its worst quarter since 2022, shedding 36% in market value. The company delivered 336,681 vehicles in Q1, missing analysts’ expectations of 360,000 to 377,590. This marked a 13% drop compared to Q1 2024, when it delivered 386,810 units. Production also fell to 362,615 vehicles from 433,371 in the prior year.

Tesla produced 345,454 units of its Model 3 and Model Y. Deliveries for those models stood at 323,800. Other models, including the Cybertruck, accounted for 12,881 deliveries. The quarter saw partial factory shutdowns to upgrade lines for a redesigned Model Y.

CEO Elon Musk said this model could again be the world’s best-selling car in 2025. But now the question is, will it?

Looking at it, Tesla faces several challenges, including increased EV competition and reputational damage tied to Musk’s political involvement. Of late, the CEO’s position in Trump’s Department of Government Efficiency (DOGE) has drawn backlash.

Protests, boycotts and vandalism against Tesla facilities and vehicles spread across the U.S and Europe. In Germany, Tesla’s EV market share dropped from 16% to 4%. Across 15 European countries, market share fell to 9.3% from 17.9%.

China also posed challenges. Tesla sold 78,828 EVs in March, an 11.5% year-on-year decline as domestic competitors like BYD increased their market presence. In Canada, Tesla claimed 8,653 EV sales during a January weekend to qualify for subsidies. The transportation ministry froze the payments and launched a probe into the claim.

Technical Analysis: Price Approaches Key Support Zone

Tesla’s price has declined sharply since hitting an all-time high of $488 in late December 2024. Since January, the stock has been in a downtrend, respecting a descending trendline. In early February, it broke a key support level at $290 and retested the level in late March before continuing downward.

Currently, the stock is approaching support at $190, a critical level for short-term price action. If it holds, the stock could attempt to break the descending trendline and move toward the $290 resistance.

If Tesla's bearish bias persists and breaks below $190, the next support sits at $140. This aligns with the head of a previously completed head-and-shoulder pattern. Breaking this level could trigger further losses.

The next few weeks will determine if it rebounds or slides deeper, with earnings report expected on Apr 22nd, 2025.