Tesla EV sales "underwhelming" as Elon Musk pivots to AI

The big picture: Tesla's first-quarter deliveries — a close proxy for sales — totaled 358,023.

• That was up 6% from the same period a year earlier, when the company was dealing with a sales backlash from Musk's leadership of President Trump's Department of Government Efficiency.
• But the performance marked an "underwhelming start" to the year, missing consensus estimates of 370,000, Wedbush Securities analyst and Tesla bull Dan Ives wrote in a research note.
• The tally fell short of expectations despite a rush of last-minute purchases of the Model S sedan and Model X crossover, which are being discontinued.

Zoom out: The showing illustrates how "Tesla is actively sacrificing its EV business in favor of a fully autonomous future," according to William Blair analyst Jed Dorsheimer.

• It's been years since Tesla debuted a mass-market consumer vehicle. Instead the company is focusing most of its attention on the Optimus humanoid and Cybercab robotaxi, plus the development of chips needed to power those technologies.
• Indeed, Musk recently announced that he would transform the factory space previously used to manufacture the Model S and Model X into space to make the humanoid, which he has described as a globally transformational product.

The impact: Tesla stock closed down 5.4% Thursday.

Yes, but: There are some positives in the EV universe.

• Tesla's deliveries in China jumped 35% in the first two months of the year, compared with a year earlier, according to Ives.
• And there are early signs that some Americans may be reconsidering EVs with gas prices topping $4 per gallon amid the Iran war.
• Hyundai said Wednesday that U.S. sales of its Ioniq 5 EV rose 13% in March, compared with a year earlier.

The bottom line: Tesla's pivot away from EVs could be coming at an inopportune time.