UBS analysts reduced Tesla’s (NASDAQ:TSLA) price target from $259 to $225 while maintaining a Sell rating, citing concerns over slowing deliveries and softer demand. As a result, the company’s shares fell around 8% intra-day today.

The firm has adjusted its first-quarter 2025 delivery forecast to 367,000 units, down from its previous estimate of 437,000. UBS attributes this revision to a weaker current production run-rate, though it expects Tesla to push for higher deliveries toward the end of the quarter, potentially through increased promotional efforts.

The new forecast represents a 5% year-over-year decline in deliveries and a sharp 26% drop compared to the previous quarter. This estimate also sits 13% below the consensus. UBS’s data indicates that wait times for Tesla’s Model 3 and Model Y remain short—typically within two weeks—in major markets, which the firm views as a sign of weakening demand.

With these factors in play, UBS remains cautious on Tesla’s near-term outlook, highlighting potential challenges in sustaining sales momentum without further strategic adjustments.