Tesla’s first quarter of 2026 did not go the way investors were hoping. The company delivered 358,023 vehicles in Q1 — missing analyst expectations and sending the stock tumbling more than 5% on Thursday, its steepest single-day drop of the year. With that fall, Tesla shares are now down 20% in 2026. For a company already nursing a bruising two-year streak of declining annual deliveries, the latest numbers land hard.

The Numbers: What Tesla Reported vs. What Wall Street Expected

Tesla produced 408,386 vehicles in Q1 2026 and delivered 358,023 — a 14% drop from the prior quarter, though a modest 6% improvement over Q1 2025, when the company recorded 336,681 deliveries. Analysts polled by StreetAccount had pencilled in around 370,000 deliveries for the quarter. Even a Tesla-compiled internal consensus, published on March 26, had estimated 365,645 — meaning the company fell short of its own compiled expectations.

The bread-and-butter Model 3 and Model Y accounted for 341,893 of those deliveries — roughly 95% of the total. Tesla’s full-year 2025 deliveries came in at 1.64 million, down from 1.79 million in 2024, continuing a trend that has now stretched across two consecutive annual declines.

The Model S and X Are Gone — and Musk Is Already Getting Sentimental

Earlier this year, Tesla officially ended production of its flagship Model S sedan and Model X SUV — the premium vehicles that defined the brand in its early years. The Fremont, California factory lines that once built them are being retooled to produce Optimus humanoid robots. Combined, the S and X accounted for just 3% of Tesla’s deliveries last year, so the financial impact is limited — but the symbolic weight is real.

“We will have an official ceremony to mark the ending of an era. I love those cars.”

— Elon Musk, via X

Musk confirmed that orders for the S and X have come to an end, with only remaining inventory still available. It’s a quiet goodbye to the vehicles that first put Tesla on the map.

Cybercab and Optimus Are the Future — But They’re Not Paying the Bills Yet

Musk has been publicly pivoting Tesla’s identity away from being an electric car company and toward a future built around autonomous vehicles and humanoid robots. The Cybercab — Tesla’s fully driverless vehicle — and the Optimus robot are the two products he has been most vocal about. Neither has generated a dollar of revenue yet.

For now, Tesla still relies almost entirely on car sales for its income. The angular Cybertruck, which began reaching customers in late 2023, has not broken through to mainstream adoption. Looking ahead, Tesla is planning to ramp up deliveries of its fully electric Semi — a Class 8 truck with a claimed range of 500 miles — later in 2026.

The Energy Business Missed Too — and Analysts Are Confused

Tesla’s automotive shortfall was expected by many on Wall Street. What raised more eyebrows was the stumble in its energy division. Tesla deployed just 8.8 gigawatt hours of battery energy storage in Q1 — well below the record 14.2 GWh deployed in Q4 2025, and also below the 10.4 GWh from Q1 2025. Energy products — including home Powerwalls, industrial Megapacks, and the newer Megablock systems — have been one of Tesla’s most reliable growth stories in recent quarters.

“This business can be lumpy and swing depending on customer grid hook-up timing, but that does not fully explain this drop-off. We are confused as to what happened with supply this quarter.”

— William Blair equity analysts, led by Jed Dorsheimer

What’s Actually Dragging Tesla Down

The headwinds battering Tesla are multiple and well-documented. Global EV demand outside of China remains under pressure. The US ended its $7,500 federal EV purchase incentive in September, removing a meaningful financial nudge for buyers. Competition from Chinese manufacturers and other global automakers has intensified sharply.

And then there’s the Musk factor. Consumer backlash against the CEO over his political activities — including his prominent role in the Trump administration, his endorsement of Germany’s far-right AfD party, and support for controversial figures in the UK — has contributed to protests and boycotts in several markets, particularly in Europe and the United States.

One unexpected tailwind: used EV sales have picked up since the US and Israel launched strikes against Iran in late February, triggering a conflict that has pushed oil prices sharply higher. With fuel costs rising, more buyers are exploring electric vehicles in the secondhand market — though that doesn’t directly benefit Tesla’s new vehicle sales numbers.

What to Watch Next: Earnings on April 22

The fuller picture will come into focus when Tesla reports its Q1 2026 earnings on April 22. Investors and analysts will be scrutinising automotive gross margins closely — a key indicator of whether Tesla’s repeated price cuts are taking a lasting toll on profitability — as well as any supply chain disruptions related to ongoing global trade tensions. How Musk addresses the energy business shortfall and the company’s longer-term autonomous vehicle timeline will also be closely watched.

For a stock already down 20% on the year, the pressure heading into that earnings call is considerable.