Tesla faces ‘Code Red’ as shares plummet ahead of earnings report

Concerns are mounting for electric vehicle giant Tesla as its stock price took a significant hit on Easter Monday, sinking nearly six per cent.

This sharp decline has left investors bracing for what analysts are calling a “code red” moment for Elon Musk’s firm, with its first-quarter earnings announcement looming large.

The share slump, which saw Tesla close at its lowest level since April 8th at $227, follows a bearish downgrade from Wells Fargo. The investment firm issued a fresh “sell” rating, citing weak vehicle delivery figures and an uncertain near-term outlook for the EV manufacturer.

This latest drop contributes to a year-to-date decline of approximately 44 per cent for Tesla’s stock, making it the worst performer among the “magnificent seven” tech stocks in 2025.

Analysts anticipate a stark downturn in Tesla’s first-quarter performance. Consensus estimates predict earnings per share of just $0.44 and revenue of $21.43 billion, which would represent the company’s weakest quarter since early 2021. These gloomy forecasts follow Tesla’s report earlier this month of a 13 per cent year-on-year drop in global deliveries – its poorest delivery performance since 2022 – signaling weakening demand in key markets such as California and Germany.

Beyond production and sales challenges, Tesla is grappling with growing brand headwinds. Analysts suggest that Musk’s increasing involvement in political matters is negatively impacting the company’s brand perception in crucial global markets.

Survey data indicates a growing reputational risk, with a notable decline in repeat buyer rates in more liberal-leaning US states.  Furthermore, over 30 per cent of surveyed consumers reportedly stated they would not consider purchasing a Tesla due to Musk’s political affiliations.

Investors will be keenly watching Tesla’s upcoming earnings call, not only for the financial figures but also for updates on the company’s future product roadmap. This includes the long-awaited lower-cost EV model and the robotaxi platform, both considered crucial pillars of Tesla’s future growth strategy.

With reported production delays for the more affordable model and no firm timeline for the robotaxi rollout, the pressure is on for Musk to reassure investors and outline a clear path forward for the company.