Average EVs cost about $6,500 more than gas vehicles, with the average Tesla transaction price being nearly $53,821.
Tesla is expected to release its Q1 delivery report on April 2.U.S. EV sales are expected to fall 28% from the previous year, while Tesla deliveries are projected to decline 4.6% over the same period, according to Cox Automotive.Analysts estimate 365,645 vehicles delivered in Q1, up 8% from a year ago but down 24% from Q4.
Tesla, Inc. (TSLA) shares are on track for their worst quarterly performance in a year, with a crucial delivery report on the horizon and no tailwind in sight, even as sharply higher gasoline prices tied to Middle East tensions would normally drive buyers toward electric vehicles. The disconnect highlights how elevated EV prices and financing costs are blunting a shift that, in past cycles, would have most benefited Tesla.
TSLA stock fell nearly 4% on Thursday, marking its worst session in almost two months, though the stock remains up more than 1% this week and is on track to snap a five-week losing streak. Shares, however, have shed over 18% so far this year and are on course to mark their worst quarterly showing since the first quarter of last year.
Higher Gas Prices Yet To Boost Tesla Demand
Rising gasoline prices would typically support demand for EVs by strengthening their relative operating cost advantage. However, research firm Cox Automotive expects U.S. EV sales to decline 28% from the previous year in the first quarter (Q1), while Tesla deliveries are projected to fall about 4.6%, according to a MarketWatch report.
Jeremy Robb, chief economist at Cox Automotive, said consumer response to fuel-price shocks often takes time to materialize and may require sustained price pressure for a longer period before influencing vehicle purchases. That shift could happen “any week,” but has not yet emerged, he said.
Tesla Delivery Report Looms Next Week
Tesla is scheduled to report Q1 production and delivery figures on April 2, with consensus estimates from 23 analysts indicating 365,645 vehicles delivered in Q1. This would represent an 8% increase from a year earlier, but a 24% decline from the fourth quarter.
Analysts expect 351,179 units to come from the Model 3 and Model Y lineup, with 13,946 vehicles from other vehicles, including the Model S, Model X and Cybertruck. For the full year, analysts expect Tesla deliveries to reach 1.7 million vehicles, up 3.3% from 1.6 million units delivered last year.
Tesla’s recent sales performance has been dragged lower by production disruptions tied to the transition to the updated Model Y platform and intensifying competition from Asian EV manufacturers. Last year marked the company’s second consecutive annual decline in deliveries after sales peaked at more than 1.8 million vehicles in 2023.
EV Affordability Pressures Limit Tesla Tailwind
The average price of a new vehicle rose to $49,353 last month, according to Kelley Blue Book, with EVs selling for $6,500 more than gasoline-powered models and the average Tesla transaction price near $53,821.
At the same time, incentives on EVs declined by $940 from a year earlier, even as discounts on gasoline vehicles increased, while federal EV tax credits expired last fall, further weighing on affordability.
Edmunds Director of Insights Ivan Drury said switching vehicles during fuel-price spikes can sometimes work against consumers, noting that “in many cases, the smarter move is to ride it out and make a more measured decision once conditions stabilize.”
He added that EV consideration rose during earlier fuel-price spikes, including after Russia’s 2022 invasion of Ukraine, though the current cycle differs as vehicle prices and borrowing costs are significantly higher. Andrew Garberson, head of growth and research at Recurrent, said: “Every signal that I see from the market reinforces that rising gas prices will only continue to make affordable EV models more attractive.”
Middle East Conflict Sends Oil Prices Soaring
Gasoline prices in the U.S. have risen by $1 per gallon since February, with the national average approaching $4 per gallon. In California, Hawaii and Washington, prices already exceed $5 per gallon.
Crude prices have surged throughout March as the conflict involving the U.S., Israel and Iran disrupted shipping flows through the Strait of Hormuz, which normally carries about one-fifth of global oil supply. Brent crude has risen over 45% this month.
Macquarie said a prolonged conflict scenario extending into June could potentially push oil toward $200 per barrel. Federal Reserve Governor Lisa Cook said the spike in oil prices has shifted the balance of economic risks toward inflation rather than employment.
What’s The Retail Sentiment On Stocktwits?
On Stocktwits, retail sentiment for TSLA slipped into the ‘bearish’ over the past week from ‘extremely bullish’ levels a month ago amid nearly a 10% rise in message volume over the last month.
TSLA sentiment and message volume as of March 26 | Source: Stocktwits
This year, TSLA stock has emerged as the second-worst performer among the “Magnificent Seven”, trailing only Microsoft.
For updates and corrections, email newsroom[at]stocktwits[dot]com.
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