Tesla beat Wall Street estimates for third-quarter deliveries on Friday, as a demand rebound in Europe offset the loss of US tax incentives and stiffer competition in China.
Shares of the Austin, Texas-based company closed up almost 5% on Friday but are still down 18% so far this year.
The figures suggest Tesla’s core car business, its biggest revenue driver, may be leveling off after two straight years of falling annual sales, even as investors increasingly look past quarterly deliveries to CEO Elon Musk’s push into AI, robotaxis and humanoid robots.
Tesla’s roughly $1.40 trillion valuation depends heavily on those long-term ambitions, even though vehicle sales are still its largest source of revenue.
Its robotaxi service is still small compared with Alphabet’s Waymo, which runs commercial services in several US cities.
Tesla delivered 486,532 vehicles in the July-September period, compared with analysts’ average estimate of 456,896 vehicles, according to data compiled by Visible Alpha.
It needs to deliver at least 311,448 vehicles in the fourth quarter to avert a third straight annual decline in deliveries.
“The strong numbers put Tesla on track for full-year deliveries growth following two years of declines. I point to FSD (Full Self-Driving) as being a differentiator that drives consumers to choose Tesla over other autos,” Morningstar analyst Seth Goldstein said.
Demand looked strong going into the quarter as finance chief Vaibhav Taneja said in July Tesla “exited Q2 with our largest order backlog since 2023.”
Unlike earlier this year, analysts have raised their full-year forecasts – now expecting 1.82 million deliveries in 2026, up from 1.65 million in the June consensus.
After last year’s slump in Europe – partly due to backlash against CEO Elon Musk’s politics – EU registrations rose by about two-thirds through August. In France, the Model Y became the best-selling car of any type, the first time a Tesla has topped that ranking.
Exports from Tesla’s Shanghai factory nearly doubled in July and August.
Analysts expect the slow rollout of the company’s Full Self-Driving software in Europe to help sales further as FSD is now approved in eight countries.
Tesla’s robotaxi service now runs without a safety supervisor inside the car in Texas and Florida. Last month, the company added its purpose-built Cybercab to its existing robotaxi service in Austin.
The company produced 464,391 vehicles during the third quarter, below estimates of 486,761 vehicles.
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