Tesla Motors stock fell Wednesday after a five-day rally took shares up nearly 30%.
Next up for investors: First-quarter deliveries and tariffs.
Shares of the electric-vehicle maker sank 5.6% to close at $272.06.
Shares of all U.S. auto makers slid midday while bracing for a tariff update from the White House. President Donald Trump plans to implement 25% import tariffs on Canada and Mexico on April 2. That could increase costs for all auto makers, including Tesla. General Motors shares finished 3.1% lower. Ford Motor stock rallied late to close up 1 cent at $10.30 a share.
A deeper dip in Tesla stock isn’t a complete surprise. Shares had climbed to $288 from $225, or 28%, over the past five days.
Shares rose 3.5% on Tuesday despite new sales data that showed Tesla sales fell 40% year over year in February, leaving them down 43% so far this year.
Investors are debating how much of the decline is related to any backlash from CEO Elon Musk’s political activities and how much is related to the Model Y changeover. Tesla recently introduced an updated version of the Y and is ramping up production of the new version.
The next significant sales data point should come on April 2, when Tesla reports first-quarter delivery results. Wall Street is looking for 414,000 vehicles sold, according to FactSet. That’s likely a little too high. Not every analyst updates numbers with the same frequency. The most recent estimates are closer to 360,000 vehicles. Tesla sold about 387,000 cars in the first quarter of 2024.
April 2 is also the day President Donald Trump’s 25% import tariffs on Canada and Mexico are set to take effect. The cars Tesla sells in the U.S. are assembled domestically, but include parts from Canada and Mexico.
“We consider Tesla the least exposed to the tariffs, noting that it was named the ‘most American-made car company’ from 2022 to 2024 by Cars.com,” wrote CFRA analyst Garrett Nelson on Tuesday. “Tesla has largely regionalized auto production and deliveries by establishing a manufacturing presence and sourcing parts across the three major markets of the U.S., Europe, and Asia.”
Cost increases from foreign-sourced parts aren’t the only impact tariffs can have. Other countries may retaliate. On Tuesday, Canadian Transport Minister Chrystia Freeland said she froze EV rebate payments for Tesla buyers, and instructed Transport Canada to revise eligibility criteria to exclude Tesla vehicles, citing the looming U.S. tariffs.
Federal purchase incentives in Canada are, or were, worth up to $5,000 for most Teslas.
Her decision comes after the city of Toronto excluded Tesla vehicles from participating in grant programs for limos and taxis in February.
For his part, CFRA’s Nelson doesn’t seem too worried about the long-term fallout from recent political issues. He rates Tesla stock at Buy and with a $385 price target.
Overall, 51% of analysts covering Tesla stock have Buy ratings, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Tesla stock is about $366.