• JPMorgan projects Tesla’s Q2 deliveries at 360,000 units, a 19% year-over-year decline, well below consensus estimates.
  • The bank warns of "material risk" to full-year targets, citing affordability pressures and potential EV credit cuts.
  • Earnings forecasts for 2025 and 2026 have been slashed, reflecting persistent headwinds in the EV market.

Tesla’s Demand Struggles Deepen

Tesla Inc. is bracing for another quarter of lackluster demand, with JPMorgan forecasting just 360,000 deliveries in Q2—a 19% drop from the same period last year and significantly below the 392,000 consensus estimate. The bank’s analysts highlighted "material risk" to Tesla’s full-year delivery goals, noting that hitting targets would require an unusually sharp rebound in the second half of 2025.

Affordability remains a key hurdle. With EV prices still elevated and federal tax credits potentially shrinking, cost-sensitive buyers are hesitating. "The combination of macroeconomic pressures and regulatory uncertainty is creating a perfect storm for Tesla," said one analyst familiar with the matter. JPMorgan responded by cutting its 2025 EPS estimate to $1.75 (from $2.07) and its 2026 forecast to $2.40 (from $2.85).

Promotions and Market Pressures

In a bid to clear inventory, Tesla rolled out aggressive end-of-quarter incentives, including 0% APR financing and free Full Self-Driving (FSD) transfers. While these moves may provide a short-term boost, they underscore the company’s struggle to maintain momentum in an increasingly competitive market. Rivals like Rivian and BYD are also leaning on discounts, squeezing margins across the sector.

Regulatory clouds loom, too. Potential cuts to U.S. EV subsidies and escalating trade tensions—particularly around Chinese-made vehicles—add another layer of uncertainty. Tesla’s energy storage business and FSD technology remain bright spots, but for now, investors are focused on the delivery shortfall. Shares dipped slightly in premarket trading following the report, continuing a volatile year for the stock.

Tesla did not immediately respond to requests for comment.