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This Week's Bonus News
Tesla: Why Things Could Get Worse Before They Get BetterReported by Sam Quirke. Originally Published: 4/13/2026.
Key Points
- Tesla shares have had a rough first quarter and remain under pressure after this week’s weak delivery data.
- Analyst opinion is sharply divided, with recent price action pointing to further downside risk in the near-term.
- However, with earnings approaching and sentiment close to rock bottom, the setup could still favor a sharp rebound if the report is strong enough.
- Special Report: Elon’s “Hidden” Company
Shares of automotive giant Tesla Inc (NASDAQ: TSLA) are trading around $345 — roughly 30% below their December highs — and remain in a grinding downtrend with little sign of reversing. What began as a January pullback has increasingly looked more prolonged: each rally is sold into and lower lows are being set. At the start of the year, there was a clear narrative shift underway. Investors were beginning to view Tesla as a robotics and automation company rather than solely an electric vehicle (EV) manufacturer. That reframing helped justify the company's triple-digit valuation and resilient bullish sentiment, but in recent weeks that optimism has started to fade. Weak delivery data released this week has refocused attention on the core automotive business. With little in the way of tangible results from the pivot to automation and AI, bulls have less to hang their hats on. With a little less than two weeks until its next earnings report, things could get worse for Tesla before they get better. Let’s jump in and see what’s going on. Weak Deliveries Bring Focus Back to the Core Business
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This week’s delivery report was a blow to Tesla investors, coming after an already difficult first quarter. Expectations weren't high, but the numbers were still disappointing and reinforced concerns about slowing demand and rising competition in the EV market. When Wall Street was fully backing Tesla’s pivot to autonomy and AI, short-term delivery fluctuations were easier to overlook. Now that that narrative has lost some momentum, investors are reanchoring expectations to the company’s core automotive operations. A Premium Valuation Means Even Less Room for ErrorThat would be less worrisome if Tesla's valuation weren't still frothy after the recent pullback. With a price-to-earnings ratio above 300, the stock is priced for substantial future growth, leaving little margin for disappointing updates like this week’s delivery report or renewed doubts about the path to profitability for its autonomy and robotics plans. There are still analysts who believe in the company's upside. Just this week, Deutsche Bank reiterated its Buy rating, calling the weakness an opportunity. That view must be weighed against JPMorgan’s recent reiteration of a Sell rating, which followed BNP Paribas' move last month. Price Action Suggests More Pain Could Be ComingBears argue that weakening fundamentals combined with a premium valuation are a bad mix. The chart’s ongoing downtrend, which hit fresh lows this week, supports that case. Technically, the stock has been forming a series of lower highs and lower lows since December, and until that trend shifts, it's hard to get bullish. At the same time, sentiment is deteriorating: the stock’s relative strength index is flirting with oversold territory. That presents an interesting setup for traders on the sidelines. On one hand, Tesla's fundamentals and price action point to further downside risk. On the other, you could argue that the worst-case scenario may already be largely priced in. Historically, that has often been where it's paid to be a Tesla bull — the company has a track record of surprising skeptics even as bearish conviction peaks. Earnings Will Be KeyThe company’s upcoming earnings report, due on 22 April, takes on added importance. With expectations lower and sentiment subdued, the potential for an upside surprise exists but is not high. Investors will be watching for signs that the longer-term strategy around autonomy, robotics, and AI is translating into tangible progress. Updates on margins and EV demand trends will also be crucial in judging whether the core business is stabilizing. If Tesla posts modestly better-than-expected results and outlines a clearer path forward, the stock could attract buyers. If the report disappoints or reinforces current concerns, the downtrend could easily extend to fresh lows — and given the premium multiple, the market may be unforgiving. |
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