Tesla’s shares took a hit on Thursday, slumping despite the automaker reporting a record quarter for global vehicle deliveries. The company delivered 497,099 vehicles worldwide in the most recent quarter, a 7.4% increase year-over-year, and a figure that significantly beat the Bloomberg consensus analyst estimate of ∼439,600.
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The stock’s decline, which follows a record monthly gain in market capitalization, highlights a growing divergence between investor sentiment and Tesla’s core EV business. Wall Street’s focus is now heavily centred on the potential of the company’s still-developing robotaxi, AI, and robotics ventures, which CEO Elon Musk has touted as the key drivers of future market value. As Benchmark analyst Mickey Legg noted, “astute investors are looking beyond near-term delivery volatility to higher-margin” initiatives like the Optimus humanoid robots.
The strong third-quarter sales were largely the result of a last-minute rush by consumers to take advantage of the $7,500 US federal tax credit for electric vehicle purchases. This incentive phase-out after September 30 created a temporary surge in demand, not just for Tesla’s aging lineup but also for competitors like General Motors, Ford, and Hyundai.
The removal of the subsidy has led to concerns about the immediate future. Cox Automotive director Stephanie Valdez Streaty predicts a slowdown, stating, “It’s going to be challenging going forward,” as the subsidy expiration creates a pull-forward effect on demand.
CFRA Research analyst Garrett Nelson added a cautionary note: “While the numbers were better than expected, we think it is important to highlight the data is backward-looking,” stressing the major questions surrounding EV demand in an unsubsidized US market. Analysts surveyed by Bloomberg currently project Tesla will log its second consecutive annual sales decline in 2025.
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The Model 3 sedan and Model Y SUV continue to be Tesla’s workhorses, accounting for the vast majority of deliveries with combined sales rising 9.4% to 481,166 vehicles. Sales of the higher-end Model S, Model X, and the Cybertruck, however, fell 30%.
Musk has warned the company could face several “rough quarters” after the incentives disappear and before autonomous vehicles are deployed at scale. Tesla’s earnings results are scheduled for October 22, and the company is delaying the launch of a more affordable Model Y version until the fourth quarter, with production expected to ramp up slowly.
In addition to vehicles, Tesla reported a record deployment of 12.5 gigawatt hours of energy products, a significant jump from 6.9 GWh a year ago. Next month, investors will vote on a new compensation package for Musk, potentially worth $1 trillion.
