Tesla’s recently released third-quarter delivery figures took the market by surprise, sparking discussions about whether its era of declining sales has ended. As the world’s highest-valued automaker, Tesla had experienced consecutive quarter-on-quarter declines in deliveries in April and July this year. Therefore, when its deliveries reached 497,099 units this quarter, a 7.4% year-on-year increase and a new record, many investors were caught off guard. However, do these seemingly strong numbers indicate a true turning point for Tesla and its CEO, Elon Musk? A deeper analysis suggests we may need to view this more cautiously.
The surge in deliveries can largely be attributed to short-term stimulus in the U.S. market. The United States is Tesla’s largest market, accounting for approximately 40% of its global sales in 2024. In the third quarter, due to the “Inflation Reduction Act” stipulating that the $7,500 electric vehicle tax credit would be revoked starting in October, many consumers planning to purchase vehicles moved their demand forward to the third quarter to lock in this incentive. This explanation is also supported by data from other U.S. automakers. General Motors, Ford, and Stellantis all reported growth in third-quarter sales, with the primary driver being electric vehicles. For instance, Ford’s electric vehicle sales (including hybrids) saw a significant 19.8% increase, while General Motors’ electric vehicle sales surged by 107%. Compared to these triple-digit growth rates from competitors, Tesla’s 7.4% year-on-year growth appears relatively modest.
Meanwhile, Tesla’s performance in other major global markets offset its growth in the U.S. The situation is particularly concerning in the European market (accounting for about 20% of its 2024 sales). Although Tesla does not disclose regional sales figures, insights can be gleaned from new vehicle registration data in various countries. While there was growth in a few smaller markets like Denmark and Norway, their combined volume represents only about 2% of global sales. In larger markets such as France and Spain, growth was minimal, and performance in the UK market remained flat. The case of Sweden is particularly telling: despite Tesla launching strong promotional measures in September, including zero-interest financing and trade-in incentives, which led to a significant month-on-month increase in sales, year-on-year sales plummeted by 65%. This indicates that Tesla is facing severe challenges in Europe.
Overall, Tesla’s third-quarter performance appears more like a short-term pulse driven by specific policies rather than a fundamental improvement in its underlying business. Looking ahead to the fourth quarter, the headwinds are more pronounced: the U.S. tax credit policy is no longer applicable, the European market remains weak despite aggressive promotions, and the company will face a tough comparison with the record-high delivery numbers from the fourth quarter of last year. As a result, sales are likely to decline once again.
Nevertheless, fluctuations in sales may not have a decisive impact on Tesla’s stock price. History shows that even during previous quarters of year-on-year declines in deliveries, its stock price was not severely affected and has remained on an upward trend year-to-date. This reflects that the current market valuation of Tesla seems to be more closely tied to its future vision in areas such as autonomous robotaxis and humanoid robots, rather than relying solely on current electric vehicle sales data.
