Tesla stock slips below $400: why upbeat EV sales estimates are not helping

Tesla stock TSLA edged lower in early trading on Wednesday, even as analysts projected stronger-than-expected second-quarter results and new data from Europe highlighted growing adoption of the company's Full Self-Driving software.

Shares of the electric-vehicle maker fell 1.6% to $398.66 in early trading.

Analysts see strong second quarter

Wolfe Research said Tesla appears on track to deliver a solid second quarter, supported by improving vehicle deliveries and profitability.

Analyst Emmanuel Rosner forecasts second-quarter deliveries of approximately 420,000 vehicles, roughly 10% above the year-earlier period and ahead of the current Wall Street consensus of around 400,000 units.

Rosner also projects second-quarter automotive gross margins excluding regulatory credits in the low-18% range, compared with 17.7% in the first quarter excluding warranty-related adjustments.

The firm expects earnings per share of approximately $0.50 to $0.52, ahead of the current consensus estimate of $0.45.

Earlier this week, Goldman Sachs also raised its second-quarter 2026 delivery forecast to 420,000 vehicles from 405,000 previously.

Despite the constructive near-term outlook, Wolfe Research argued that vehicle deliveries and automotive profitability represent only a small portion of Tesla's overall valuation.

"The much bigger part, in our view, is tied to confidence around their longer-term (and more significant) initiatives across Robotaxi, Humanoids, and ancillary AI services," Rosner wrote.

Robotaxi rollout remains key focus

According to Wolfe Research, investor attention remains centered on Tesla's ability to execute on its autonomous driving and robotics ambitions.

Rosner warned that deployment timelines appear slower than previously expected, particularly in robotaxis.

The analyst said Tesla is likely to miss its first-half deployment targets and noted that "ramp curves are shallower than previously expected, most notably in robotaxi."

Competition is also intensifying.

Wolfe pointed to Alphabet-owned Waymo's plans to expand into 20 cities this year, Mobileye's goal of deploying 100 robotaxis by 2027, and increasing humanoid robot production efforts from Figure AI and Boston Dynamics.

Rosner also commented on investor speculation surrounding Tesla and SpaceX.

"TSLA stock has continued to hold up well even as investors gravitate towards SPCX, with the market assuming increasing likelihood of an eventual TSLA/SPCX merger, which provides downside support," the analyst wrote.

However, Wolfe Research said any such transaction would likely not occur until at least mid-2027.

European FSD adoption expands

Separately, the Dutch road authority said 40,000 Tesla vehicles in the Netherlands have begun using the company's Full Self-Driving (Supervised) software since receiving approval earlier this year.

According to the regulator, those vehicles have collectively traveled 24 million kilometers without any serious incidents.

Although Tesla markets the system as Full Self-Driving (Supervised), it remains classified as a driver-assistance system.

Drivers are required to keep their attention on the road and be prepared to intervene at any time.

"Because of the continuous and strict monitoring of the driver within the vehicle, the driver assistance system is at least as safe as other driver assistance systems," the agency said in a statement.

The Dutch regulator approved the technology on April 10, following what it said was 3,000 hours of testing across tracks and public roads in varying weather conditions.

The agency said it is monitoring the technology on a monthly basis rather than the annual reviews typically conducted for driver-assistance systems.

The Dutch approval has also served as the basis for provisional approvals in Belgium, Denmark, Estonia, and Lithuania.