Bearish outlooks on Tesla (TSLA) are emerging as analysts cut earnings predictions for the company after it missed first quarter expectations for deliveries and production numbers. Guggenheim Securities Vice President of Automotive Equity Research Ronald Jewsikow joins Market Domination to discuss headwinds contributing to the bearish views.

Jewsikow states that although Tesla has faced supply issues, the weakened outlook is "mostly a function of demand." He notes slowed growth in the US, China, and European markets, describing it as "a very messy first quarter." Even looking beyond this quarter, he expresses concerns lingering structurally across all regions.

Regarding China, Jewsikow forecasts that achieving growth in the market this year will be a "struggle." He highlights the increased competition Tesla faces in the market, with competitors offering products directly competing with Tesla's offerings at better price points.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

Editor's note: This article was written by Angel Smith

Video Transcript

BRAD SMITH: Wall Street getting more bearish on Tesla after a rough start to the second quarter. A number of analysts cut their price targets this week after the company reported disappointing first quarter delivery numbers. Guggenheim reiterated its sell rating and lowered the price target on the stock to $122 from the previous $132.

Let's bring in Ronald Jewsikow, who is the Guggenheim Securities Director of Automotive Equity Research to discuss more. Ronald, take us into your thesis here. I mean, you're looking at a few things, the delivery downside in this quarter saying it's a function of demand and not supply here. What is the demand profile that you're seeing in this environment as a lot of customers seem to be wavering here on their purchase intent?

RONALD JEWSIKOW: Absolutely, I would say mostly a function of demand. There obviously were supply issues we think on the Model 3 in the US, but the most of the downside this quarter relative to both year over year and the fourth quarter of last year was driven by demand. We think US volumes were down something in the range of 20% to 25%. We don't get that number in the release but we're able to back into it from other regional data. And I think understandably, it was a very messy first quarter. US EV demand slowing, China competition is quite strong, both BYD, Xiaomi, Huawei, which operates through the AITO brand. And then Europe really hasn't grown for 5/4 now for Tesla.