Tesla stock is down recently despite reporting record third-quarter deliveries of about 497,000 vehicles, surpassing analyst expectations. The decline in stock price can be attributed to several factors:
- The recent surge in sales was largely driven by customers rushing to take advantage of the expiring $7,500 US federal EV tax credit at the end of September. Investors are concerned whether Tesla can maintain demand now that the subsidy has expired.
- Tesla's outlook for the fourth quarter and for 2026 suggests a significant drop in deliveries is expected due to the tax credit expiration, which is raising caution among investors.
- There have been production cuts and bottlenecks as Tesla adjusts to weakening demand post-subsidy.
- Investor skepticism remains about whether Tesla’s autonomous driving and robotaxi ventures can offset declines in vehicle sales, as these technologies are still in early testing phases.
- Elon Musk's increasing political and social controversies are alienating potential buyers in key markets, which is also dampening investor sentiment.
- Tesla shares remain highly valued compared to fair value estimates, causing some to view the stock as overvalued given current challenges.
Overall, while Q3 deliveries set a record, concerns about the sustainability of demand and upcoming weaker quarters have led to a downturn in Tesla’s stock price.
