High Stakes Ahead of Tesla’s Delivery Report

Tesla (NASDAQ: TSLA) is expected to release its Q2 2025 delivery report later this week, and investor expectations have been tempered by growing signs of continued demand weakness. JPMorgan issued a notably bearish outlook, forecasting that Tesla may have delivered only 360,000 vehicles in the second quarter—roughly 19% below the same period last year and significantly short of the 392,000 consensus. The delivery report could serve as a critical inflection point for Tesla’s growth narrative and for investor sentiment heading into the second half of the year.

JPMorgan Sees Sharp Delivery Decline in Q2

According to JPMorgan’s latest client note, Tesla’s Q2 deliveries are expected to fall to 360,000 units—well below the Wall Street consensus of 392,000. This would mark a year-over-year decline of approximately 19%, highlighting ongoing demand challenges across Tesla’s core markets in North America, Europe, and China. The firm stated that there is “material risk” to Tesla’s full-year delivery guidance, with current H2 expectations hinging on an “unusually sharp rebound” that appears increasingly difficult to achieve under prevailing macroeconomic conditions.

Key Headwinds: Affordability and EV Credit Uncertainty

Two core issues appear to be weighing heavily on Tesla’s performance. First, affordability concerns remain at the forefront. Elevated interest rates, persistent core inflation, and tighter credit conditions have constrained consumers’ ability to finance new vehicle purchases, especially those in the premium segment. Second, there is growing uncertainty surrounding government subsidies and EV tax credits, particularly in the U.S. market. Speculation about potential cuts to federal EV incentives is dampening buyer enthusiasm and complicating Tesla’s pricing strategy.

EPS Estimates Slashed for 2025 and 2026

JPMorgan also revised its earnings forecasts for Tesla downward, reflecting a more cautious outlook on volume growth and pricing power. The firm now expects Tesla to earn $1.75 per share in 2025, down from a prior estimate of $2.07. For 2026, earnings are projected to reach $2.40 per share, a sharp revision from the earlier $2.85. These downward revisions underscore growing skepticism around Tesla’s ability to maintain margins in a slowing EV market and amid intensifying global competition.

Market Implications: A Fragile Valuation

Tesla’s stock has experienced considerable volatility in 2025. Despite periodic rallies driven by hype around autonomous driving, AI integration, and energy products, the core automotive business continues to face headwinds. Should the Q2 delivery report confirm a meaningful shortfall, it may trigger a broader round of estimate downgrades and price target cuts from other institutions. Tesla’s high valuation multiples—still among the most elevated in the auto industry—leave the stock particularly vulnerable to any perceived erosion in growth or profitability.

A Pivotal Moment for Elon Musk’s Strategic Narrative

This delivery report is not just about numbers—it is a pivotal test of confidence in Elon Musk’s broader vision. At the start of 2025, Musk promised a bold transformation of Tesla into an AI-powered mobility and robotics powerhouse. However, for many investors, these ambitions are secondary to the fundamental requirement of steady execution in vehicle deliveries and earnings performance. The delivery miss, if confirmed, could shift investor attention back to operational execution rather than long-term moonshots.

Looking Ahead – Q3 and Beyond

The path forward for Tesla will depend on its ability to address short-term demand concerns while keeping long-term innovation intact. The company must balance aggressive pricing with margin preservation and find ways to stimulate demand without overreliance on subsidies. With new product launches—including the long-awaited Robotaxi platform—on the horizon, the pressure to stabilize core metrics such as deliveries and EPS is mounting.

The second half of 2025 will be decisive: either Tesla rebounds strongly, validating bullish projections, or further softness will force a market reassessment of its trajectory. For now, all eyes are on the Q2 delivery figures. A significant miss could mark the beginning of a more cautious phase in Tesla’s valuation story.