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Tesla delivered 336,681 vehicles in the first quarter, missing the consensus estimate of 377-380K and falling short of the whisper number of around 355K. This represented a 13% drop from the 386,810 deliveries in the first quarter of 2024.
Shares of Tesla declined by 2.3% before the report and dropped further after. The company reported producing 362,615 vehicles and confirmed that progress on the New Model Y is proceeding well.
European Sales Weakness
Poor delivery figures indicate weak sales in March, with reports showing a 37% decrease in France and a 64% decline in Sweden year-on-year for the same month. More market data is expected in the upcoming days.
An analyst revised his estimates downwards but suggested that political challenges tied to Elon Musk’s image will eventually lessen, predicting a 5% sales increase in the fourth quarter. However, current numbers suggest that brand damage may be more severe than anticipated.
What’s been observed so far paints a clear picture. The first quarter showed a pronounced drop in vehicle deliveries—nearly 13%, to be precise—while expectations stayed considerably higher. That shortfall hints at more than just logistical hiccups. When deliveries miss both formal estimates and informal expectations, or “whisper numbers,” it sends a direct message: market sentiment may have been too optimistic.
The latest figures aren’t just statistically poor—they coincide with weaker monthly sales in key European markets. A 64% drop in one country and a 37% fall in another aren’t seasonal fluctuations. They suggest underlying demand might be slipping, whether that’s driven by consumer perception, political noise, or changing industry preferences. Such declines, especially over a full year, warrant full attention.
Market Sentiment Drivers
In the wake of these results, the analyst’s forecast for a modest uptick in the final quarter of the year feels more of a long-term hedge rather than a confident statement about performance improving any time soon. With revised expectations, he appears to be acknowledging that projected gains later this year are based more on the assumption that negative opinions will fade, rather than early signs of momentum returning.
That said, the market’s reaction—already sliding before the delivery numbers and dropping further after—sends a reliable signal: many participants were prepared for disappointment but not at this scale. Looking ahead, we’re faced with a backdrop where production still seems stable, with a decent output logged for the quarter and hints of progress in newer models. Yet production without delivery strength creates only part of the story and not necessarily the reassuring part.
So how should we move? The fresh gap between what was expected and what was achieved—especially in territories where past performance was strong—should shift our attention to implied volatility and volume. Traders relying solely on technical indicators without pairing them with recent delivery and sales patterns may catch themselves flat-footed.
This is the time to be exacting in what is priced into short-dated options. When a firm this prominent has a delivery miss of this size, historical correlations between price action and realised volatility often weaken. We need to consider the possibility of continued dislocation between fundamentals and stock movement, particularly while sentiment remains reactive.
Contract structure should lean towards scenarios where near-term weakness does not fully extend but does not reverse either. Short gamma trades that rely on tight movement may become exposed in choppy conditions. Instead, positioning toward strategies that widen the net of potential strikes—while still focusing on volume trends—could provide cushion. Unusual volume in out-of-the-money puts has already started to materialise, a clue worth tracking closely.
We’ve also started to see intraday reratings in implied volatility, with the skew slightly steepening as downside hedges get picked up. If that continues, adjustments in delta hedging approaches and time-decay considerations will be necessary. Those holding positions across expiration dates should take care to rebalance exposures accordingly, especially with guidance expected later this month.
Supply chain commentary and global unit economics will likely be dissected line by line in the upcoming quarterly call—not because they will surprise, but because the tone management takes will guide the volatility curve. Any slight nod towards pricing shifts, or a change in messaging around model timelines, could disrupt earlier forward assumptions that are still embedded in multi-month calls.
At this stage, we’re not dealing with a one-off miss but a string of data points that suggest a pattern. Traders locking in delta-neutral positions should recheck assumptions on correlation between shipping data and forward-looking demand estimates in the main overseas markets.
Follow-through will matter far more than headlines. Pay particular attention to updated global sales data expected within the next two weeks. If the numbers from Asia mirror what we’ve already seen, current implied vols are likely underestimating the forward realised variance.
Let’s stay alert to cross-asset signals, too. Rates volatility may be flagging broadly, but stock-specific vol events are resurging. Price gaps haven’t yet found a clear stabilisation level. Until volume confirms a base, it’s only wise to approach short-dated exposure with greater flexibility, adjusted stopouts, and more responsive vega management.
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