Tesla surpassed Wall Street’s expectations for third-quarter deliveries on Friday. The recovery in demand from Europe helped offset the impacts of lost tax incentives in the U.S. and increased competition in China.
Up until the most recent closing, the stock had dropped over 21% this year.
The reported figures indicate that Tesla’s primary car business, which generates the most revenue, might be stabilizing after two consecutive years of annual sales declines. Meanwhile, investor interest seems to be shifting towards CEO Elon Musk’s initiatives in AI, robotaxis, and humanoid robots.
Even though vehicle sales continue to be Tesla’s top revenue source, the company’s valuation of approximately $1.40 trillion heavily relies on these long-range goals.
In comparison to Alphabet’s Waymo, which operates commercial services across numerous U.S. cities, Tesla’s robotaxi services remain relatively modest.
Tesla delivered 486,532 vehicles during the July to September period, exceeding analysts’ average estimate of 456,896 vehicles, as indicated by data from Visible Alpha.
To prevent a third consecutive year of declines in deliveries, Tesla must deliver at least 311,448 vehicles in the fourth quarter.
“The strong numbers set Tesla up for growth in full-year deliveries after two years of setbacks. I believe Full Self-Driving (FSD) will be a key factor that persuades customers to choose Tesla over other brands,” stated analyst Seth Goldstein from Morningstar.
The demand appeared robust leading into the quarter, with finance chief Vaibhav Taneja noting in July that Tesla “ended Q2 with our largest order backlog since 2023.”
In contrast to earlier this year, analysts have increased their full-year projections and now anticipate 1.82 million deliveries in 2026, a rise from the previous estimate of 1.65 million made in June.
After a downturn in Europe—partly attributed to backlash against Musk’s political views—EU registrations rebounded by about two-thirds through August. Notably, the Model Y became the best-selling car of any kind in France, making history as the first Tesla to secure that title.
Moreover, exports from the Shanghai factory nearly doubled during July and August.
Analysts expect the gradual rollout of the FSD software in Europe to further boost sales, especially since FSD is now approved in eight countries.
Currently, Tesla’s robotaxi service operates without a safety supervisor inside the vehicle in Texas and Florida. Recently, the company introduced its specially designed Cybercab into its existing robotaxi fleet in Austin.
In the third quarter, Tesla produced 464,391 vehicles, which fell short of the estimated 486,761 vehicles.
