Tesla EV deliveries set to drop on weak demand, aging lineup

Tesla Model 3 electric vehicles at the company’s store in Colma, Calif. (David Paul Morris/Bloomberg)

Tesla Inc.’s vehicle sales likely declined in the third quarter, and Wall Street sees little reason to expect the electric car maker to return to meaningful growth anytime soon. 

The company likely delivered around 463,761 vehicles worldwide in the last three months, according to analysts’ estimates compiled by Bloomberg, down about 7% from a year earlier. Tesla is expected to report sales results Oct. 2.

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That comparison is skewed by the rush of U.S. buyers who purchased EVs before a federal tax credit expired last September, which helped Tesla notch a third-quarter delivery record of nearly 500,000 cars — a threshold it has approached several times in the last few years but never surpassed. 

Analysts expect the company to eke out modest growth with 1.77 million deliveries for the full year after two consecutive annual declines. With weaker U.S. demand, intensifying competition in China and an aging lineup, Tesla’s auto business is set to muddle along rather than rebound.

Investors are keeping their expectations relatively low for the business that still generates most of Tesla’s revenue while looking for signs of progress on CEO Elon Musk’s push into autonomous driving, artificial intelligence and robotics. They’re also waiting to see whether widespread speculation about a Tesla-SpaceX merger turns into something more concrete. 

“The legacy EV business has reached the point where it is stabilized, but at the same time, it’s not a business I see growing again at the rapid rate that it did in previous years,” said Andrew Rocco, a stock strategist at Zacks Investment Research.

Spending on the company’s futuristic product lines are expected to surpass $25 billion this year. It could be years before any of those efforts, including its slow-growing robotaxi service and yet-to-be-launched Optimus robot business, make notable impacts on margins. 

Even so, the shares remain largely anchored to those catalysts, said JPMorgan analyst Rajat Gupta. He has among the highest delivery estimates of surveyed analysts at 482,000 vehicles. That’s despite lowering his target on Sept. 28 due to concerns about sales in the U.S. and China. 

Tesla’s shares are down more than 20% this year through the Sept. 30 close but have rebounded somewhat over the last two months.

Absent any fresh unveilings on its longer-term projects, Tesla in recent weeks has been hyping previously announced products. In September, it held two launch-style events for the Cybercab and its long-promised Semi. Next up is a public debut for the Roadster, a vehicle more than a decade in the making, which was rescheduled for later in the month due to weather, the company said. 

The launches could help give Tesla’s stale lineup a boost, said Garrett Nelson, senior equity analyst at CFRA Research. “The company desperately needs a new model, a successful new model, from a brand standpoint,” Nelson said. At the same time, Nelson highlighted sales in the European Union as a bright spot among the EV maker’s three major markets. 

In the EU, where sales plunged last year amid backlash against Musk, new Tesla registrations rose 52.7% in August and 65.9% through the first eight months of 2026, according to the European Automobile Manufacturers Association. EV demand is surging there, fueled by soaring gas prices and an influx of cheaper Chinese-made EVs. 

While Tesla is benefiting from a decline in EV models from other automakers around the world, it’s increasingly facing headwinds from Chinese brands as they dominate the auto market. 

The growth in the EU could help balance global sales as Tesla battles sluggishness and pushes discounts in the U.S. and China, its two biggest markets. Data from Cox Automotive for the quarter shows that while Tesla remains the biggest EV player in the US, overall sales are down 31% year over year.

In China, where Tesla has been offering end-of-quarter discounts on Model 3 and Y vehicles, the EV maker is fighting to hold onto share in an increasingly crowed market. About 36,000 of Tesla’s 86,000 Chinese-built cars were shipped overseas for sale in August, according to data from China’s Passenger Car Association, as Shanghai-made deliveries declined month-over-month.