Tesla's third-quarter deliveries fell 2% year on year despite beating forecasts

Tesla produced 464,391 vehicles in the quarter, below the 486,761 analysts had estimated, the company said. Deliveries rose from 480,126 in the second quarter, which Tesla reported on 2 July. The size of the beat depends on the consensus used: StreetAccount put the average estimate at 461,100, and Tesla's company-compiled consensus was 461,974, CNBC reported.

A beat that is still a decline

Tesla does not break out deliveries by model or region. It said the Model 3 and Model Y accounted for 98% of the quarter's total. Deliveries are the closest approximation of sales Tesla reports, but they are not precisely defined in its shareholder communications, CNBC noted.

The figures suggest Tesla's core car business may be leveling off after two straight years of falling annual sales, RTÉ reported. Tesla delivered 1,636,129 vehicles in 2025, about 9% fewer than the 1.79 million of 2024, which was below the 1.81 million peak of 2023, Electrek reported.

Europe offsets US and China

Europe drove the rebound. EU registrations rose by about two-thirds through August, recovering from last year's slump, RTÉ reported. That slump was partly driven by backlash against Elon Musk's politics. The Detroit News reported that the European rebound offset weaker demand in the US and China and the loss of US tax incentives.

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. Full Self-Driving is now approved in eight countries, and analysts expect a slow European rollout to help sales, RTÉ reported.

Finance chief Vaibhav Taneja said in July that Tesla 'exited Q2 with our largest order backlog since 2023.' The US federal EV tax credit ended after 30 September 2025 under President Donald Trump's spending bill, CNBC reported. Drive Tesla Canada reported that Tesla does not provide regional delivery figures, so the European recovery will not be broken out.

Profit backdrop from the second quarter

The profit picture comes from Tesla's second-quarter report in July, not the October delivery release. Gross margin slid to 16.8% from 17.2% a year earlier, missing the 19.4% StreetAccount estimate, and operating margin fell to 1.4% from 4.1%, CNBC reported. Free cash flow turned negative at $1.1 billion after $146 million positive a year earlier.

The squeeze is not new. Operating margin ran at 5.8%, 5.7%, 4.2% and then 1.4% across four straight quarters, according to the Motley Fool.

What investors are pricing

Before the report, Tesla stock was down more than 21% this year as of Tuesday's close, underperforming all of its megacap tech peers, CNBC reported. Shares climbed 5% on Friday, 2 October, after the delivery release.

In a column published on 18 September, the Motley Fool put the shares at around $358, down about 28% from a 52-week high of $498.83, said they traded at more than 330 times earnings, and found that shares fell on the day of each of the four delivery reports before that column. The S&P 500 finished close to flat on all four dates, it said. The sharpest case was the 2 July report: 480,126 deliveries, about 74,000 above expectations, and a stock drop of about 7%. The streak was newer than it looked: shares rose about 5% on the July 2025 and April 2025 report days.

At that price the market is paying for robotaxis, the Cybercab and humanoid robots rather than this year's delivery counts, the Motley Fool argued. RTÉ put Tesla's valuation at roughly $1.40 trillion, dependent on those long-term ambitions.

Tesla's robotaxi service now runs without a safety supervisor inside the car in Texas and Florida. In September, the company added its purpose-built Cybercab to its existing robotaxi service in Austin, RTÉ reported.

Morgan Stanley analysts, who recommend holding the stock, said after the report that Tesla may be 'exiting the EV winter.' RBC, which has an outperform rating, called the delivery figure 'impressive' in a note out Friday.

The fourth-quarter threshold

Tesla needs at least 311,448 deliveries in the fourth quarter to exceed 1.64 million for 2026 and surpass the 2025 total, CNBC reported. RTÉ reported that the figure would avert a third straight annual decline in deliveries.

Analysts have raised their full-year forecasts to 1.82 million deliveries for 2026, up from 1.65 million in the June consensus, RTÉ reported. The comparison point is 418,227 vehicles from the fourth quarter of 2025, reported on 2 January 2026 and down 15.6% from 495,570 a year earlier, Investor's Business Daily reported.

Tesla said it will report third-quarter earnings on 21 October after the market close.