Market Position - Tesla surpassed Ford to become the 2nd leading EV seller in the UK [1]

Core Viewpoint - Goldman Sachs has significantly reduced its forecast for Tesla's second-quarter vehicle deliveries, raising concerns about the company's sales performance amid political tensions involving CEO Elon Musk and former President Donald Trump [2][3]. Group 1: Sales Forecast and Performance - Goldman Sachs analysts have cut their forecast for Tesla's second-quarter vehicle deliveries to 365,000, which is below the consensus estimate of 405,000 [2]. - This forecast represents an 18% decline compared to the same period last year, marking the weakest quarterly deliveries growth since at least 2015 [2]. Group 2: Political Tensions and Brand Sentiment - The ongoing conflict between Musk and Trump could further damage Tesla's brand sentiment, particularly among left-leaning consumers, who have historically been the primary market for electric vehicles [3][4]. - Analysts warn that this political discord may alienate multiple sides of the political spectrum, potentially impacting Tesla's sales and market perception [4]. Group 3: Stock Performance and Market Reactions - Despite the negative news, Tesla's stock saw a 6% rebound on Friday, although it remains down 9% since Wednesday [5]. - The uncertainty surrounding the Musk-Trump relationship has raised concerns among analysts regarding Tesla's near-term outlook [5]. Group 4: Potential Impact of Government Relations - Trump has threatened to cancel federal contracts with Musk's companies, which could indirectly affect Tesla, particularly through the potential restriction of automotive regulatory credits [6]. - Tesla reported $595 million in regulatory credits, which accounted for about two-thirds of its net profit of $934 million in the first quarter of 2025, indicating the significance of these credits to Tesla's financial health [6]. Group 5: Background Context - Since Musk's acquisition of Twitter (now X) in 2022, Tesla's stock has faced downward pressure due to Musk's increasing political involvement [7]. - The relationship between Musk and Trump has deteriorated, as evidenced by Trump's decision to sell his Tesla Model S, further complicating the dynamics for Tesla [8]. Group 6: Upcoming Events - Tesla is expected to report its Q2 delivery numbers on July 2, which will provide further insights into the company's performance amid these challenges [9].

Core Insights - Tesla's car sales have experienced significant declines in several European countries for five consecutive months, attributed to CEO Elon Musk's political controversies and an aging vehicle lineup [1][10] Sales Performance - In Sweden and Portugal, Tesla's new car sales fell by 53.7% and 68% year over year, respectively, while overall EV sales in those countries increased by approximately 25% [2] - Tesla's sales also dropped by 30.5% in Denmark, 36% in the Netherlands, 19% in Spain, and 67% in France [2] - Conversely, Norway saw a remarkable increase in Tesla sales, which surged by 213% in May, driven by the introduction of updated Model Y SUVs [3][10] Product Availability and Demand Stimulation - The new Model Y is available for order in many European markets, but deliveries of the most affordable variant are only expected to begin this month in countries like Germany, the UK, France, and Italy, affecting May's sales data [4] - To stimulate demand, Tesla has been offering various financial incentives in Sweden, Germany, Britain, and France, as well as interest-free loans for the new Model Y in Norway [5] Competitive Landscape - BYD Company Limited, a Chinese EV maker, saw a 359% year-over-year increase in total sales in Europe in April, surpassing Tesla's EV sales for the first time [6] - Volkswagen AG gained 1.1% market share in Europe in April 2025, leading the European EV market, with notable growth in its subsidiaries Skoda and Audi [7] Financial Performance and Valuation - Tesla has underperformed compared to the Zacks Automotive – Domestic industry and the Auto, Tires and Truck sector year to date, with a loss of 15.1% compared to the industry's decline of 14.2% and the sector's decline of 9.6% [8] - The Zacks Consensus Estimate for Tesla's EPS has decreased by 13 cents and 16 cents for 2025 and 2026, respectively, in the past 30 days [11] - Tesla appears overvalued based on its price/sales ratio, trading at a forward sales multiple of 10.56, significantly higher than the industry's 2.77 [12]