UBS cuts Tesla Q1 delivery estimate and says concerns are growing that robotaxis might not wow investors

• Tesla will report vehicle deliveries for the first quarter in the coming weeks.
• UBS analysts scaled back their delivery estimate, predicting a decline from Q4.
• They also said investors are expressing concerns about robotaxis and robotics initiatives.

Tesla stock has battled volatility for much of the last 18 months, and UBS says that sagging vehicle deliveries and stiffening competition in the robotaxi space could soon add to investors' concerns.

UBS analyst Joseph Spark and his team lowered their outlook for first-quarter vehicle deliveries in a note on Thursday. UBS maintains a Sell rating on Tesla stock, which is down 17% year to date. The analysts' price target of $352 implies another 8% downside from current levels.

In their note, they predict Tesla will report 345,000 vehicle deliveries for the first quarter of 2026. While that's a 2% year-over-year increase, it's an 18% decrease from the previous quarter.

"This compares to our initial 1Q26 forecast of 360k and is now -7% below Visible Alpha consensus of 371k," the UBS team wrote.

Spark added that EV deliveries may not be as significant for Tesla stock as they once were, but they're still important.

"While we expect sentiment will continue to overwhelmingly drive the stock (certainly more than auto deliveries), it is (primarily) the auto business that helps fund Tesla's cash flow and hence their investment for growth ($20bn capex this year)," he said.

The analysts added that investors may be focused on other areas such as AI and robotaxis. However, recent developments suggest the robotaxi market will be highly competitive, and investors are growing concerned that it might not stand out.

"Recent investor feedback has been that Robotaxi and Optimus updates are slower/more muted than expected," Spark stated. "In the wake of Nvidia's Alpamayo and other AV announcements (including Waymo's scaling), we also believe that there is growing sentiment that Tesla may not sustainably differentiate on robo-taxis."

Other concerns about Tesla's auto business have arisen as Elon Musk recently pushed back the release of the long-awaited Tesla roadster, saying that it will likely happen later in the year.