• Tesla might be facing another difficult quarter, Baird analysts warn.
• The firm predicts Tesla will face a 5% decline in sales as compared to the previous year in its second quarter.
• The carmaker reported a drop in its delivery numbers for the first time since 2020 last week.

Tesla could be hit with yet another difficult quarter after its sales dropped to their lowest point since 2020 earlier this year.

The electric-car maker is likely to face a “messy” three months ahead, according to analysts from Robert W. Baird & Co. Baird analyst Ben Kallo said in a note that he anticipates the automaker will deliver nearly 5% fewer cars in the second quarter of 2024 as compared to the same period the previous year, according to a report from MarketWatch.

“We think Q1 results will be messy due to several one-time items and continue to believe Q2 estimates are likely still high,” Kallo wrote, according to MarketWatch.

The analyst said the firm anticipates Tesla will continue to face difficulty boosting sales in the months to come due to higher interest rates.

“There is no denying that the demand environment has deteriorated,” Kallo wrote in the note, according to a report from Bloomberg.

Despite the warning note regarding future delivery numbers, Baird removed Tesla from its Bearish Fresh Pick list, citing Elon Musk’s announcement that Tesla will unveil its first robotaxi in August, as well as growth in the energy business. The company was originally put on the list after a Delaware judge struck down Musk’s $55 billion pay package.

“We speculate Tesla likely unveils both a robotaxi and a $25k vehicle,” Kallo wrote. “In the past Tesla shares have traded higher into these events and become a ‘sell the news’ event.”

Musk announced the company would show off its first robotaxi shortly after Reuters released a report indicating Tesla had abandoned plans for its $25,000 EV. In response, Musk wrote on X that “Reuters is lying (again).”

Last week, Tesla’s first-quarter delivery numbers fell below Wall Street’s lowest estimates, dropping 20% from the previous quarter and over 8% year-over-year. At the time, Tesla blamed the decline on its production ramp for the refreshed Model 3, an arson attack at its Berlin factory, and supply-chain issues caused by the Red Sea conflict. Tesla’s stock dipped more than 5% on the day the delivery numbers were released and it’s down more than 29% year to date.

For his part, Musk has said Tesla is “between two major growth waves.” But it’s unclear when the automaker will step out of the slump.

The Tesla CEO has said, “we dug our own grave” with the production ramp-up for the Cybertruck. Meanwhile, Musk is already making plans for what sounds like an increasingly ambitious second-generation Tesla Roadster.

A spokesperson for Tesla did not immediately respond to a request for comment.