At a glance, Tesla’s third-quarter numbers look impressive. The company reported global vehicle deliveries of 497,099 for Q3 – setting a new quarterly record – while sales jumped 7% year over year. Last Wednesday, the company reported a 12% increase in revenue for Q3 after two straight periods of declines.
But there’s a catch: One key reason for the strong numbers was the expiration of the $7,500 federal EV tax credit, which prompted many American consumers to rush out and buy electric vehicles before they got more expensive. Now that tax credit has expired, it doesn’t bode well for the future of the company.
And while revenue rose in the quarter, Tesla missed profit expectations, sending the stock stumbling after the announcement Wednesday.
The EV Race
Stepping back from Tesla’s headline-grabbing quarter, the bigger picture is less impressive. Despite record deliveries, the company is still on pace for its second consecutive year of declines — even as the global EV market continues to grow, driven by lower-cost competition from China.
Adding to the pressure, Elon Musk’s political controversies and divided attention across ventures have weighed on Tesla’s brand and distracted from its core business, according to reporting from Bloomberg and CNBC. Meanwhile, the company has yet to launch a new, mass-market vehicle to rival the success of the Model Y, instead shifting focus toward long-term bets on artificial intelligence and robotics.
That’s where some investors see hope. Dan Ives of Wedbush remains bullish, suggesting Tesla could hit a $2 trillion valuation by 2026 if its “golden AI chapter” delivers. The company’s robot, Optimus, received far more attention on the latest earnings call than the company’s long-promised robotaxi.
Still, before that futuristic vision takes shape, Tesla must stabilize its core business.
Shareholders will vote on Musk’s multibillion-dollar pay package on November 6th — a decision many see as key to keeping him focused as the company navigates this critical turning point.
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