Tesla Misses by 40k as China Cuts Deepen

The delivery miss and the ASP decline hit simultaneously, and the math is multiplicative. At 384k units against a 422k consensus, Tesla came up short on volume. Layer in ASP down 11% YoY and Q1 revenue lands materially below what sell-side models were pricing. These aren't independent data points — they're the same signal: demand isn't strong enough to hold price.

The 7% Model Y cut in China is the tell. BYD has forced Tesla into a pricing dynamic it didn't design for, and each incremental cut raises the question of whether Europe and the US hold or follow. The last time Tesla ran global price cuts aggressively — 2022 into 2023 — gross margin compressed from roughly 29% to 17% over six quarters. The current bull case requires that China is a localized one-off. There's no evidence yet that it is.

Watch the Q1 earnings call for gross margin per vehicle guidance. If Musk frames the China cuts as transitory and Vaibhav Taneja holds the 20%-plus gross margin target, the stock bounces. If that target gets walked back, the thesis cracks. The flip would be volume recovery with stable ASP — neither is showing up in this print.