01:52 PM EDT, 06/06/2025 (MT Newswires) -- Tesla's (TSLA) deliveries in 2025 and 2026 will likely take a hit amid weakness in China and the European Union and an expected removal of electric vehicle support from the US budget, Oppenheimer said Friday.

The brokerage reduced its vehicle delivery outlook for the EV maker to 1.63 million units from 1.67 million for this year and to 1.81 million units from 1.85 million for 2026. Deliveries from China production are down more than 17% year over year, while EU deliveries are tracking about 40% lower, according to Oppenheimer.

With deliveries not tracking well and "EV support poised to be removed from the US budget, we continue to see downside risk to deliveries even as we lower estimates," Oppenheimer analysts, including Colin Rusch, said in a note to clients.

On Thursday, Tesla Chief Executive Elon Musk and US President Donald Trump launched a war of words over Musk's opposition to the president's proposed tax bill, which is pending in the Senate.

Musk is "upset" about the elimination of EV credits, CNBC reported, citing Trump. "I'm very disappointed in Elon," Trump reportedly told reporters at the White House. "I've helped Elon a lot."

"Without me, Trump would have lost the election," Musk said Thursday in a post on social media platform X.

The president is "not interested" in getting on a phone call with Musk to resolve the ongoing spat, NBC News reported Friday, citing a senior White House official.

Tesla shares were up 5.6% in Friday afternoon trade after slumping 14% in the previous session. The stock has lost nearly 26% in value so far in 2025.

The brokerage said that Musk can still impact the budget bill. He has a broad public reach, as well as information on the Trump administration's strategy, which he could use to Tesla's advantage, according to the note.

Oppenheimer lowered its 2025 and 2026 adjusted earnings and revenue estimates for Tesla, citing available sales data for the last two months. "We believe the combination of brand damage and increased competition will weigh on results over the next few years," the analysts said.

In April, Tesla reported first-quarter financial results that fell more than expected and said that mounting trade policy uncertainty could reduce demand of its products in the near term.

"The difficult work at (Tesla) is just beginning as the company starts to repair brand damage while executing on its physical artificial intelligence strategy," Oppenheimer said Friday. "We continue to see challenges in (Tesla's) autonomy platform given its reliance on photon counting cameras and expect investors to be less forgiving of product delays given Musk's adjusted political standing."

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