Al Root

Tesla stock fell early Tuesday after more bad sales news out of Europe. Sales just haven't picked up yet.

Shares of the electric vehicle maker were falling 1.8% at $275.13 in premarket trading, while S&P 500 and Dow Jones Industrial Average futures were down 0.3% and 0.4%, respectively.

Tesla's April sales in Germany amounted to 885 vehicles, down 46% year over year, according to the Federal Motor Transit Authority.

It's one of the latest sales data points Tesla investors have. Across Europe Tesla sales dropped 37% year over year in the first quarter. Globally, Tesla delivered about 337,000 vehicles during the three months -- down 13% year over year.

Falling sales stoked fears that CEO Elon Musk's political activities were turning off some car buyers. Tesla management admitted to some brand "challenges" on their company's first-quarter earnings conference call. Those challenges could be part of the reason Musk announced during the call he would be spending less time in Washington, D.C. heading the Department of Government Efficiency.

To be sure, Musk made his decision in late April, and the weak sales number represents one month in one country. But Tesla sales don't seem to be getting a bounce from an updated version of the Model Y.

The Model Y is one of the best-selling vehicles on the planet. Failure to get a sales bump from an updated model would be another disappointment for investors.

Tariff uncertainty could be hitting Tesla stock, too. President Donald Trump recently altered his auto tariff policies, giving manufacturers some relief on imported parts, but tariffs still threaten industry profits -- and no one knows just how bad things can get.

Ford Motor reported first-quarter earnings on Monday evening. It suspended full-year financial guidance, estimating a 2025 "gross" tariff impact of $2.5 billion and a "net" tariff impact of $1.5 billion. (Ford will work to offset tariff-related cost increases.)

Ford's prior financial guidance called for a 2025 operating profit of about $7.8 billion, so the $1.5 billion net impact is about 20% of prior guidance.

General Motors trimmed its financial guidance by almost 25%. The midpoint of its 2025 operating profit is now about $11.3 billion, down from $14.7 billion.

GM imports about 40% of the cars it sells domestically. Ford imports about 20%. Chrysler parent Stellantis imports just over 40% of the vehicles it sells domestically. Stellantis suspended its financial guidance at the end of April. Its prior guidance provided in February called for positive sales growth and mid-single-digit operating profit margins.

Tesla doesn't give guidance, and it assembles all the cars it sells domestically in the U.S. It has a lower tariff exposure than most auto makers, but still faces tariffs on some imported parts.

"Tariffs are still tough on a company when margins are still low," said Tesla CEO Elon Musk on Tesla's first-quarter earnings conference call. "But we do have localized supply chains in...America, Europe, and China."

Tesla reported a first-quarter operating profit margin of just 2%. It was the weakest margin since the second quarter of 2019.

Rivian reports first-quarter earnings on Tuesday evening. It also assembles all the cars sold in the U.S. domestically. Investors will get another chance to see how parts tariffs could affect a car maker.

Coming into Tuesday's trading, Tesla shares were down about 31% so far this year. Shares of Stellantis and GM were down 28% and 15%, respectively. Shares of Ford and Rivian were up 3% and 2%, respectively.

Write to Al Root at allen.root@dowjones.com

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May 06, 2025 07:53 ET (11:53 GMT)

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