Tesla (TSLA) stock experienced a rollercoaster ride on Wednesday, beginning with a sharp decline due to disappointing Q1 delivery numbers. The reported 336,681 vehicle deliveries were significantly below the expected 377,000, marking a 13% year-over-year and 32% quarter-over-quarter decline. This caused TSLA shares to plummet over 6% at market open, dropping to approximately $251. However, heavy buying activity later in the day reversed this trend, propelling the stock above $282—a more than 5% intraday gain.
Musk’s Political Ties, Market Gains, and Tesla’s Struggles in Global Demand
The recovery in Tesla’s stock price was partly influenced by President Donald Trump’s comments regarding Elon Musk. Trump announced that Musk would be stepping back from his government role with the Department of Government Efficiency (DOGE) to refocus on his businesses, including Tesla.
The broader stock market also saw gains due to the March ADP Employment Change report, which showed stronger-than-expected job growth. As a result, the Dow Jones Industrial Average (DJIA) climbed 0.4%, while the NASDAQ rose 0.7%.
Tesla Stock Rebounds After Sharp Drop as Investors Weigh Weak Q1 Deliveries and Political TurmoilTesla’s delivery struggles stem largely from declining demand in China and Europe. Musk’s political ties with the Trump administration have damaged Tesla’s brand in international markets, particularly as the White House continues its trade war.
Moreover, a controversial incident involving Musk allegedly making a Nazi-era salute further hurt Tesla’s reputation. Analysts, including Dan Ives from Wedbush Securities, described the Q1 delivery figures as a “disaster,” casting doubt on Tesla’s ability to meet its full-year delivery targets.
Investor Concerns Grow as Tesla Faces Downgrades, Union Backlash, and Market Challenges
Investor sentiment around Tesla has turned increasingly cautious. Swedish insurer Folksam divested its $160 million stake in the company due to Musk’s anti-union stance. Additionally, Wells Fargo set a $130 price target on TSLA stock, citing slowing delivery growth, narrowing profit margins, and rising competition from Chinese EV makers. The delivery estimates for the rest of the year—456,000 in Q2, 497,000 in Q3, and 544,000 in Q4—have not yet been adjusted but now seem overly ambitious.
Despite the volatile price action, Tesla’s stock appears to be improving from a technical perspective. It needs to surpass $288 to break above the 200-day Simple Moving Average (SMA), a crucial indicator of long-term momentum. Key support levels remain at $265 and $222, while the 50-day SMA at $313 represents the next major resistance point. A sustained move above this level would be required to confirm a bullish reversal for TSLA stock.