TSLA Stock Tumbles 5% Following Q1 Delivery Miss — Street Weighs In On Demand, Potential Discounts, AI Strategy

• Truist noted that Tesla provided no updates on key AI initiatives or new vehicles. 
• Wedbush noted that Europe remains a significant headwind, with Tesla still navigating a difficult regulatory environment for FSD approval.
• The Future Fund managing partner expects price cuts or discounts going forward to push demand.

Shares of Tesla Inc (TSLA) closed down 5% on Thursday after the company said that it delivered 358,023 vehicles in the first quarter of 2026, marking mild growth from the corresponding quarter of 2025, but a dive from the December quarter.

The Q1 numbers fell below a company-compiled analyst estimate of 365,645 deliveries. The company also said that it produced 408,386 vehicles in the quarter and deployed 8.8 gigawatt hours of energy storage products.

Wall Street Weighs In

Truist analyst William Stein lowered the firm's price target on Tesla to $400 from $438 following the delivery report and kept a ‘Hold’ rating on the shares. The company’s delivery numbers fell below estimates, as did energy storage deployments, the analyst said, while adding that the company further provided no updates on key AI initiatives or new vehicles.

While near-term results disappointed, the greater long-term focus remains on AI developments, particularly the company’s Full Self-Driving (FSD) driver assistance technology, which are seen as more critical to future cash generation and stock performance than auto deliveries, the firm said.

Europe Remains A Sore Spot, Says Wedbush

Wedbush noted that Europe remains a significant headwind, with Tesla still navigating a difficult regulatory environment for FSD approval and regional sales unlikely to rebound until regulators give the green light, something Wedbush believes will happen in the first half of 2026. China, by contrast, was a bright spot, it added.

While the delivery numbers were quite underwhelming, this was not a shock to Wedbush given the current EV backdrop across geographies as the company shifts gears to focus more on its AI strategy, the firm said. Wedbush has an ‘Outperform’ rating on the shares with a price target of $600.

Discounts Incoming?

The Future Fund Managing Partner Gary Black, stated in a post on X that the huge gap between Tesla’s production and deliveries in Q1 likely reflects weak demand for the company’s electric vehicles in the U.S.

“I estimate $TSLA had 29 days of sales in finished goods inventories at end of 1Q - which would be among the highest level of inventories carried by TSLA since 2019. That could signal price cuts or discounts in the coming quarters,” he said.

EV Demand Is Solid, Says Munster

Deepwater Management managing partner Gene Munster, meanwhile, said that the underwhelming delivery numbers doesn't change the takeaway.

“March deliveries were the first solid read on underlying demand; they grew without the help of tax credits, and growth going forward should quicken,” Munster said.

He also noted that several rival automakers have pulled back on EVs in the recent months, a move he expects to be costly in the long term.

How Did Retail Traders React?

On Stocktwits, retail sentiment around TSLA stock stayed within the ‘bearish’ territory over the past 24 hours, while retail chatter remained at ‘high’ levels.

TSLA stock has gained 28% over the past 12 months. 

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