Tesla made an unusual move in the final days of 2025 that raised eyebrows across Wall Street: the electric vehicle giant released its own "company-compiled" delivery consensus, setting expectations notably below where analysts had positioned themselves.

The median estimate of 420,399 vehicles for the fourth quarter trails Wall Street's broader consensus of approximately 440,000 units by nearly 5%. If Tesla hits this lower target, full-year 2025 deliveries would total approximately 1.64 million vehicles—confirming a roughly 8% decline from 2024 and marking the second consecutive year of falling sales.

Managing Expectations

Tesla's decision to publicly float a lower delivery figure breaks from its typical practice of letting analysts set their own estimates. Industry observers interpreted the move as a strategic attempt to cushion expectations ahead of what could be a disappointing report.

"This is Tesla trying to get out in front of bad news," said automotive analyst Rebecca Lindquist at Evercore ISI. "By anchoring expectations at a lower number, any beat—even a modest one—can be spun as a positive surprise."

The company is expected to release official Q4 delivery numbers in early January, as it has done in previous years.

What's Behind the Weakness

Several factors have converged to pressure Tesla's vehicle sales throughout 2025:

Aging model lineup: Tesla's core offerings—the Model 3, Model Y, Model S, and Model X—have received only incremental updates while competitors have launched fresh designs. The "refreshed" Model Y that debuted in early 2025 generated initial enthusiasm but failed to sustain momentum.

Cybertruck struggles: The angular pickup truck, which CEO Elon Musk once predicted would become the world's best-selling vehicle, has faced persistent production challenges and softer-than-expected demand. A key battery supplier recently walked away from the majority of a massive deal, raising questions about the vehicle's future.

Intensifying competition: Traditional automakers and Chinese EV makers have flooded the market with compelling alternatives. General Motors, which captured the 2025 U.S. auto sales crown with 2.83 million vehicles sold, has gained significant ground in the electric segment.

Political backlash: Musk's high-profile political involvement has alienated some potential buyers, particularly in California and other traditionally strong Tesla markets.

The Valuation Disconnect

Despite the fundamental deterioration, Tesla's stock has defied gravity. Shares trade around $454, giving the company a market capitalization of $1.52 trillion and a price-to-earnings ratio exceeding 310.

"There's a complete disconnect between Tesla's auto business and its stock price. Investors aren't buying the car company—they're buying the robotaxi dream, the energy storage story, and Musk's vision of the future."

— Daniel Chen, Senior Analyst at Bernstein

This view is gaining traction among Tesla bulls. Deutsche Bank's Yu and Wedbush Securities' Dan Ives have both argued that traditional automotive metrics are increasingly irrelevant for valuing Tesla. They point to the company's supervised robotaxi service in Austin, Texas, which launched in June, as evidence of a broader transformation.

Ark Invest Trims Position

Not everyone is maintaining their conviction. Cathie Wood's Ark Invest, long one of Tesla's most vocal supporters, quietly reduced its holdings by 60,715 shares across its ARKK, ARKW, and ARKQ ETFs in recent days—a sale worth approximately $30 million.

While the reduction represents a small fraction of Ark's overall Tesla position, it signals that even committed believers may be taking some chips off the table at current valuations.

The Bull Case: Autonomy or Bust

For Tesla to justify its premium valuation, the autonomy story must deliver. The company has been gradually expanding its Full Self-Driving capabilities, and Musk has teased that he recently tested the Austin robotaxi service without a human safety monitor behind the wheel.

Some analysts project robotaxi operations could expand to dozens of U.S. cities by the end of 2026, which would dramatically reshape Tesla's revenue potential and profit margins. Unlike selling hardware-intensive vehicles, autonomous ride services offer the potential for software-like margins and recurring revenue.

But skeptics note that Tesla has repeatedly pushed back timelines for full autonomy, and regulatory hurdles remain significant. Waymo, backed by Alphabet, and General Motors' Cruise are also pursuing the robotaxi market, though with very different approaches.

What Investors Should Watch

The Q4 delivery report, expected in the first week of January, will provide the first concrete data point of 2026. Key metrics to monitor include:

  • Total deliveries: The company-suggested 420,399 figure, or a beat/miss
  • Cybertruck volumes: Progress on the troubled pickup line
  • Geographic mix: Performance in China, where local competitors are gaining share
  • Energy storage: Growth in the Megapack and Powerwall segments

For long-term investors, the fundamental question remains unchanged: Is Tesla a car company trading at a ridiculous premium, or a technology platform that happens to make cars? The answer may not become clear until the robotaxi vision either delivers or disappoints—a resolution that could still be years away.