More Bad News For Tesla Amid Musk-Trump Spat: Goldman Forecasts Worst-Ever Quarterly Delivery Growth

Goldman Sachs slashed its Q2 Tesla vehicle delivery forecast to 365,000, 18% below last year and significantly under the 405,000 consensus, citing concerns over CEO Elon Musk's increasingly public political stances and a potential fallout with former ally President Trump. Analysts warn that Musk's political activity could alienate EV purchasers and that Trump's threats to federal contracts and regulatory credits could impact Tesla's profitability, as regulatory credits comprised roughly two-thirds of Tesla's Q1 net income. Despite a Friday stock bounce, Tesla shares remain down 9% since Wednesday, reflecting market uncertainty surrounding the Musk-Trump division.

Analysis

Goldman Sachs has significantly reduced its Q2 Tesla vehicle delivery forecast to 365,000 units, a figure substantially below the analyst consensus of 405,000 and representing an 18% year-over-year decline, potentially marking the weakest quarterly delivery growth for Tesla since at least 2015. This pessimistic outlook is amplified by mounting Wall Street concerns regarding CEO Elon Musk's increasingly prominent political activities and a publicly deteriorating relationship with former President Donald Trump. Analysts, including Morgan Stanley's Adam Jonas, warn that this political embroilment could alienate segments of Tesla's traditional EV customer base and introduce further uncertainty, as noted by TD Cowen's Itay Michaeli. The situation is exacerbated by Trump's threats, which include potentially canceling federal contracts with Musk's companies—though this would likely affect SpaceX more—and, more critically for Tesla, potentially restricting its ability to sell automotive regulatory credits. These credits are a significant profit driver, having constituted approximately two-thirds of Tesla's $934 million net income in Q1 2025 with $595 million in contributions. Tesla's stock has reflected this heightened uncertainty, declining 9% since Wednesday despite a partial recovery on Friday, as Musk's political outspokenness, particularly since his 2022 acquisition of Twitter (now X), has frequently correlated with downward pressure on the stock. The market awaits Tesla's official Q2 delivery numbers, expected on July 2, for further clarity.

Key Decisions for Investors

• Investors should closely monitor Tesla's upcoming Q2 delivery report on July 2, as it will be a critical data point against the backdrop of lowered analyst expectations and heightened political risks.
• Consider the increased volatility and downside risk associated with Tesla stock due to the CEO's political entanglements and the potential impact on brand sentiment and regulatory credit revenue, which significantly contributes to profitability.
• Evaluate exposure to Tesla in light of the potential for political actions to directly affect its financial performance, particularly concerning the high-margin regulatory credits, and weigh this against any rebound driven by broader market rallies or company-specific news.