Should You Buy, Sell, or Hold Tesla Stock as Its China Deliveries Fall?
Tesla (TSLA) is seeing a significant rally after news broke of a temporary 90-day tariff pause between the U.S. and China. This comes as Tesla has been struggling with declining deliveries in China, which is the company's largest international market and a manufacturing hub for the automaker.
Tesla investors are now optimistic after the tariff pause announcement, which has sent shares up by over 6% in Monday trading. The deal should give Tesla more breathing room as China and the U.S. work on a more comprehensive trade deal.
Deliveries in China Fall
The tariffs pause will help Tesla, but it is unlikely to reverse the concerning trends underway.
The latest figures from the China Passenger Car Association (CPCA) paint a worrisome picture for Tesla investors. Tesla sold 58,459 vehicles last month, which is down almost 6% year-over-year and 25.84% from March.
Plus, retail sales in China – cars made in China for sale in the country – to 28,731 vehicles in April 2025. This implies an 8.56% decline year-over-year and a 61.24% decline from March sales.
Other Chinese EV makers have been capturing the market share lost. It now has just 3.2% of China's new energy vehicle (NEV) market, down sharply from 7.5% in March and 4.6% a year earlier. BYD (BYDDY) maintained its dominant position with 268,778 NEVs sold in the retail market in April and 29.7% market share.
Is the Delivery Slump Temporary?
Some bulls argue that Tesla's sales pattern is lumpy due to its practice of front-loading exports early in the quarter and focusing on domestic deliveries later. I don't think this is the case since Tesla's current China lineup is aging with no new releases to reignite demand.
Chinese consumers are also looking at Tesla as a less innovative company than its rivals. For instance, BYD, which has the leading market share, recently released new fast-charging tech that can fully power a battery in as little as 5 minutes. Plus, the fact that Tesla is not a Chinese-owned brand is something that many experts warn could hurt sales volumes if Chinese consumers respond to U.S. trade tension by prioritizing domestic brands.
An easing of tariffs should improve Tesla's performance in China, but local competition is not going to go away. Tesla was already losing market share before new tariffs went into effect.
Should You Buy, Sell, or Hold TSLA Stock?
Tesla has joined the rest of the market in a rally and has hit a $1 trillion valuation again. Despite dismal Q1 earnings, many investors here are still bullish due to Robotaxi and Optimus robot promises.
But until fundamentals catch up, TSLA stock is unlikely to keep defying gravity. If broader market optimism continues, the stock will go up, but there are better places to put your money for such gains. There's a massive downside risk if Tesla keeps underperforming. It's hard to justify paying 156 times adjusted forward earnings and almost 9.8 times sales for a company that has declining revenue and has taken on so much brand damage.
Until Musk's promises materialize, I'd keep my 'Sell' rating here. You will get better upside potential with much less downside risk in any other Magnificent 7 stock.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
4 hours ago
- Globe and Mail
New Strong Sell Stocks for June 16th
Here are three stocks added to the Zacks Rank #5 (Strong Sell) List today: ADT Inc. ADT is a smart home solutions providing company. The Zacks Consensus Estimate for its current year earnings has been revised 1.2% downward over the last 60 days. DoubleDown Interactive Co., Ltd. DDI is a digital gaming company. The Zacks Consensus Estimate for its current year earnings has been revised 6.3% downward over the last 60 days. M/I Homes, Inc. MHO is a residential home-builder. The Zacks Consensus Estimate for its current year earnings has been revised 7.8% downward over the last 60 days. View the entire Zacks Rank #5 List. Zacks' Research Chief Names "Stock Most Likely to Double" Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest. This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%. Free: See Our Top Stock And 4 Runners Up Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ADT Inc. (ADT): Free Stock Analysis Report M/I Homes, Inc. (MHO): Free Stock Analysis Report DoubleDown Interactive Co., Ltd. Sponsored ADR (DDI): Free Stock Analysis Report This article originally published on Zacks Investment Research (
Canada News.Net
6 hours ago
- Canada News.Net
Zoox launches first robotaxi facility ahead of Las Vegas debut
HAYWARD, California: In a significant step toward its commercial debut, Amazon-owned Zoox has unveiled its first factory dedicated to building robotaxis, setting the stage for a direct showdown with Waymo and Tesla in the autonomous vehicle space. The facility in Hayward, California, was announced this week. It spans 220,000 square feet and is designed to produce over 10,000 units annually at full capacity. While initial production goals weren't shared, Zoox said the expansion aligns with growing demand ahead of its launch plans. The company is already testing over 20 vehicles in several U.S. cities. It aims to roll out commercial rides in Las Vegas this year, followed by a broader rollout in San Francisco. It currently operates in the SoMa district and expects to begin onboarding public riders soon. "This expansion, plus the anticipated demand once rides open up to the general public, and additional market entrances in the coming years, warrants this increase in robotaxi production," Zoox said in a statement. Unlike rivals, Zoox operates purpose-built autonomous vehicles without steering wheels or pedals — boxy shuttles that stand out from traditional cars retrofitted with sensors. Tesla plans to launch its robotaxi service on June 22, starting with Model Y vehicles and later a two-seater "Cybercab." Waymo, meanwhile, has years of experience with driverless fleets and is expanding nationally. Despite growing momentum, robotaxi developers face continued scrutiny over safety and regulation, with federal investigations and recalls following various crashes involving autonomous vehicles.
Globe and Mail
7 hours ago
- Globe and Mail
Is BigBear.ai Stock a Buy Now?
The hot artificial intelligence (AI) market has birthed a number of high-flying AI stocks. One of these is (NYSE: BBAI). The company's share price soared more than 200% over the past 12 months through June 18. The stock hit a 52-week high of $10.36 in February after President Donald Trump announced Project Stargate, which aims to invest billions of dollars into the AI sector. Since then, stock is down more than 50% from its peak. Does this present an opportunity to scoop up the company's shares for cheap? Why shares plummeted A confluence of factors led to the decline in stock this year. One is Wall Street's concerns about the unpredictable macroeconomic environment, exacerbated by the Trump administration's tariff approach. On top of that, the federal government is cutting budgets. This is worrying because delivers AI solutions centered around national security and infrastructure. Consequently, the bulk of company revenue comes from federal government contracts. Adding to this mix, in March, disclosed a material weakness in its internal controls for financial reporting, contributing to the company's share price decline. As a result, the company restated the last few years' worth of financial statements. While unrelated, CFO Julie Peffer departed in June. This wasn't 2025's only leadership change. In January, gained a new CEO, Kevin McAleenan, who had served as Acting Secretary of the U.S. Department of Homeland Security during President Trump's first term. financial picture leadership changes may be a good outcome over the long run. McAleenan's experience with the previous Trump administration could help survive the government budget cuts. In addition, under the previous CEO, the company fell short of its 2024 goal to achieve at least $165 million in sales, coming in at $158.2 million last year. With McAleenan taking over, perhaps can meet its 2025 full-year revenue target, which ranges between $160 million and $180 million. He will have to succeed to win shareholder confidence in his leadership. It's too early to tell if McAleenan can deliver, since he only has the first quarter under his belt. brought in $34.8 million in Q1 sales, a 5% year-over-year increase. However, the company's balance sheet includes a sizable chunk of debt. Of its $198.5 million in total Q1 liabilities, $101.4 million was debt. Q1 total assets were 396.3 million with $107.6 million of that in cash and equivalents. Moreover, despite year-over-year sales growth, is not profitable. It exited Q1 with a net loss of $62 million. Deciding whether to buy stock It's not uncommon for tech companies to operate at a loss, but in these cases, you want to see sales growing rapidly. With just a 5% year-over-year increase in Q1 revenue, is not achieving strong growth, especially for the hot field of artificial intelligence. This raises questions about the company's ability to capture customers, let alone eventually achieve profitability. stock valuation is another factor to consider. The price-to-sales (P/S) ratio is useful for this purpose, since it measures how much investors are willing to pay for every dollar of revenue. This metric is commonly used with companies that aren't profitable. Comparing it to artificial intelligence leader Nvidia, as well as a competitor also operating in the government AI sector, helps to understand share price valuation. Data by YCharts. The chart shows P/S multiple is the lowest of the three AI companies, and it's down significantly from where it was at in February. This suggests shares are attractively valued. However, Nvidia and warrant higher valuations because of their business performance. For example, Nvidia's revenue rose 69% year over year to $44.1 billion in its fiscal Q1, ended April 27. Meanwhile, revenue of $108.7 million in its fiscal fourth quarter, ended April 30, represented a 26% year-over-year increase. mediocre AI revenue growth, debt, and the factors that led to its share price decline this year means investing in the company is risky. As a result, it's best to hold off buying. Instead, watch its business performance over the next few quarters to see if it can strengthen sales before reconsidering stock. Should you invest $1,000 in right now? Before you buy stock in consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!* Now, it's worth noting Stock Advisor 's total average return is994% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025
