Tesla is expected to release its fourth-quarter 2025 delivery report today, January 2, 2026, and the numbers are anticipated to tell a sobering story: the world's most valuable automaker likely experienced its second consecutive year of declining sales, even as its stock price hovers near all-time highs.

The Numbers Tell a Difficult Story

In a highly unusual move in late December, Tesla published a company-compiled consensus of analyst projections on its Investor Relations website—a practice typically performed by third-party research firms. The consensus figure: 422,850 vehicle deliveries globally for the fourth quarter of 2025.

If this forecast proves accurate, it would represent a 15% decline from the same period in 2024 and bring Tesla's total 2025 deliveries to approximately 1.64 million vehicles. That would mark not just a year-over-year decline, but the second such decline in a row—an unprecedented situation for a company that built its reputation on exponential growth.

Why the Dramatic Slowdown?

Multiple factors converged to create what analysts are calling a "perfect storm" for Tesla's delivery numbers in Q4:

The Tax Credit Cliff

The most significant factor was the expiration of the $7,500 federal EV tax credit on September 30, 2025. This created what economists call a "demand pull-forward effect," where customers who were planning to buy in Q4 instead rushed to complete purchases in Q3 to claim the credit.

Tesla's third-quarter deliveries surged to record levels as buyers raced against the deadline. The inevitable consequence: dramatically weaker demand in the following quarter as the pool of ready buyers was depleted.

"The tax credit expiration caused a massive acceleration of demand into Q3, leaving Q4 with significantly fewer customers ready to purchase,"

noted automotive industry analysts tracking the EV market

Intensifying Competition

Tesla also faces increasing pressure from traditional automakers who have launched competitive electric vehicles, particularly in the crucial Chinese market where domestic manufacturers like BYD have gained significant ground. In Europe, stricter emissions regulations have pushed legacy automakers to aggressively price their EV offerings, often matching or undercutting Tesla's prices.

The Stock Market Paradox

Perhaps the most puzzling aspect of Tesla's current situation is the disconnect between delivery numbers and stock performance. Despite the weak sales data and consecutive years of declining volumes, Tesla shares recently hit fresh all-time closing highs, trading near levels that value the company at over $1.2 trillion.

Why are investors seemingly unconcerned about falling deliveries?

The AI and Autonomy Premium

Wedbush Securities analysts suggest that the market is looking beyond vehicle sales to Tesla's potential in artificial intelligence and autonomous driving. The firm has called 2026 a potential "monster year" for Tesla—but with an important caveat: the company must deliver on its ambitious AI promises.

Specifically, investors are pricing in expectations for:

  • Full Self-Driving (FSD) advancement: Progress toward true autonomous driving capability that could enable a robotaxi business
  • AI computing: Tesla's Dojo supercomputer and AI training infrastructure
  • Energy storage growth: Rapidly expanding battery storage deployments
  • New product launches: Including the long-delayed Cybertruck ramp and the promised lower-cost vehicle

Industry Context: The EV Slowdown

Tesla isn't alone in experiencing challenging EV market dynamics. Traditional automakers have also reported slower-than-expected EV adoption, with several scaling back production plans and delaying new model launches.

General Motors, Ford, and other manufacturers have pivoted strategies to emphasize hybrid vehicles over pure electric models, responding to consumer hesitation around charging infrastructure, range anxiety, and the higher upfront costs of EVs without tax credits.

The broader EV market in the United States grew in 2025, but at a slower pace than industry forecasts had anticipated, suggesting that the sector may be entering a more mature growth phase rather than the explosive expansion many predicted.

What Analysts Are Watching

Beyond the headline delivery number, analysts will scrutinize several key metrics in Tesla's release:

Production vs. Delivery Gap

A growing gap between vehicles produced and vehicles delivered could indicate inventory building or demand softness. Conversely, if production significantly outpaces deliveries, it might suggest manufacturing efficiency gains or preparation for a new model launch.

Geographic Breakdown

Performance in China, Tesla's second-largest market, will be particularly important. Any significant year-over-year declines in Chinese deliveries would reinforce concerns about competitive pressures from domestic manufacturers.

Model Mix

The proportion of higher-margin Model S and Model X deliveries versus the mass-market Model 3 and Model Y will affect profitability, even if total volumes disappoint.

Management's Challenge

When Tesla reports full fourth-quarter earnings in late January, CEO Elon Musk and the executive team will face pointed questions about the path back to volume growth. Investors will want to hear:

  • Guidance for 2026 deliveries
  • Pricing strategy in a more competitive environment
  • Timeline for new, more affordable models
  • Progress on autonomous driving technology
  • Plans to address manufacturing overcapacity

The Bigger Picture

Tesla's current predicament represents a inflection point for the company. After years of defying skeptics with rapid growth and industry disruption, Tesla now faces the challenge of maturing from a high-growth disruptor into a sustainable, profitable automaker—while simultaneously trying to transform into an AI and robotics company.

The market's continued confidence in Tesla's stock price suggests investors believe the company can execute this transition successfully. However, consecutive years of delivery declines put pressure on management to demonstrate that the AI and autonomy vision isn't just a compelling narrative, but a achievable business plan.

As the Q4 delivery numbers arrive today, they will provide important data points in assessing whether Tesla's best growth days are behind it—or whether the company is simply in a temporary transition before its next phase of expansion.