Latest / Elon Musk Podcast / Tesla suffers MASSIVE 15% Drop in Sales

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Tesla suffers MASSIVE 15% Drop in Sales · Elon Musk Podcast

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  Tesla just did something it has never done before.
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  The company posted its own delivery expectations for the
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  fourth quarter directly to its investor relations website.
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  For years, Tesla has compiled a consensus of Wall Street analyst
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  estimates, but only shared that data privately through emails to
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  a select list of analysts and major investors.
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  And on Monday, it published the numbers for everyone to see.
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  The median expectation is 4/23/99 vehicles.
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  For quarter 4/20/25, the average is 4/22, 8:50.
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  That would represent a 15% drop from the same quarter of last
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  year. That is not a good number, and
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  the fact that Tesla is putting it out there in public ahead of
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  the actual result tells you something about what they expect
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  the actual results to look like. And why would a company that is
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  supposed to be all about growth announce in advance that it is
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  about to post a big decline? Now, the answer has to do with
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  the end of the federal EV tax credit, a record third quarter
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  that pulled the man forward in a narrative that Tesla wants to
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  control. This is a defensive move.
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  We're going to walk through what these numbers actually mean, why
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  Tesla released them on their own and what it says about what the
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  company is doing and where they're headed.
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  And we'll get right into that after this very short break.
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  Now, Tesla is expected to report its Q4 delivery results by the
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  end of this week. And if the company hits the
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  consensus it published, full year 2025 deliveries will come
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  in at approximately 1.64 million vehicles.
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  That is an 8.3% decline from 2024, when Tesla delivered 1.79
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  million cars. It would mark the second
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  consecutive year of declining deliveries for the electric
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  automaker. In 2024, deliveries fell about
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  1%. This year, the drop accelerates.
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  That's a problem for companies whose valuation depends on
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  growth. Tesla trades at roughly 200
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  times forward earnings. The stock is up about 14% this
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  year, and those numbers do not normally go together with
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  falling sales. Now, the fourth quarter was
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  always going to be difficult. The $7500 federal EV tax credit
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  expired on September 30th, 2025 and under the Inflation
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  Reduction Act, the credit had been applied directly at the
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  point of sale, which made it even more attractive than the
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  old rebate structure. Going from that to nothing was
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  guaranteed to hurt the demand for a Tesla, and in the third
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  quarter buyers rushed to lock in the credit before it
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  disappeared. Tesla delivered a record 497,000
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  vehicles in Q3. That's about 75,000 more than
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  the Q4 consensus. In a lot of those Q4 sales got
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  pulled forward into Q3. That created a vacuum in Q4 the
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  Tesla is now trying to fill. Now, Tesla new Q4 was going to
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  be a rough one, Elon Musk said so on the July earnings call, he
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  warned shareholders of potentially rough quarters in
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  Q42025Q12026 and Q22026. And what he did not say was that
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  Tesla would publish its own lowered expectations ahead of
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  the actual numbers. That's the unusual part.
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  And by releasing the consensus itself, Tesla is trying to
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  anchor the conversation. If the company delivers 425,000
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  vehicles, that'll look like a beat against the 422A50
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  benchmark. Without the official
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  publication, the same number might have been framed as a miss
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  if anyone claimed 440-5000 was the target.
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  Now Bloomberg's consensus, which is compiled differently, sits
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  AT4404405000 sold, and that's 22,000 higher than Tesla's
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  posted figure. The gap matters because it
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  determines whether headlines say beat or miss.
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  Now, I've been digging through our analytics of the show and
• 3:53
  notice that 37% of you are following this channel.
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  For you, I'm forever grateful the other 63% of you haven't hit
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  the follower subscribe button. I've been an independent
• 4:04
  journalist covering Elon Musk Space Flight tech for the last
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  six years, and I'll continue for the next 10.
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  And all I ask from you is one second of your time and hit the
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  follow or subscribe button on the platform you're watching or
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  listening on right now. I'm extremely grateful for you
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  and blessed to have you in this community.
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  So thank you very much for that. Now, the underlying demand
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  picture is worse than the quarterly number suggests.
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  In November, Tesla's U.S. sales dropped to approximately 39,800
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  vehicles, according to estimates from Cox Automotive.
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  That's a 23% decline from November 2024.
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  There's also Tesla's lowest monthly U.S. sales volume since
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  January 2022. This happened despite Tesla's
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  best efforts to stimulate demand.
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  After the tax credit expired, the company launched new
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  standard versions of the Model 3 and Model Y priced about $5000
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  lower than the previous base models.
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  The cheaper variants were supposed to offset the loss of
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  the $7500 credit. They did not.
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  Cox reported that the standard versions mostly cannibalized
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  sales of the premium versions rather than expanding the
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  market. And Tesla is pulling every lever
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  that it has. The company is offering 0%
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  financing on the standard. Model Y is unusually steep
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  promotion for a model that only began deliveries weeks ago.
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  Tesla is also offering zero down leases and free upgrades on
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  inventory vehicles. These are roughly the most
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  aggressive end of quarter incentives the company has ever
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  offered. If the demand was there, they
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  would not be offering 0%. Financing and inventory levels
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  tell the same story. At the end of Q3, Tesla had
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  about 40 days of supply on dealer lots.
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  By November, the number climbed to 149 days, a 42% increase year
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  over year. Vehicles that were built to meet
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  pre exploration demand are now sitting unsold in lots.
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  Now, the US is not Tesla's only problem.
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  Sales have been declining in Europe, where the company faces
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  intense competition from Chinese EV makers offering newer, better
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  and more affordable models. In California, the largest EV
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  market in the country, Tesla's registrations fell 11.6% in
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  2024, even as the overall EV market grew slightly.
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  And if you remove Tesla from the equation, California's EV market
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  grew 20%. Tesla's market share dropped
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  from 60% in 2023 to 52.5% in 2024.
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  That trend has continued in the 2025 in The backlash against
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  Musk's political activities has not helped them at all.
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  Protests against Tesla have been documented at dealerships and
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  service centers. Musk's role in the Trump
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  administration, his support for far right political parties in
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  Europe, and his polarizing public statements have alienated
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  some potential buyers. So what does Tesla's investor
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  base see that the sales numbers do not show the answer.
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  Autonomy. Elon Musk has been pivoting the
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  company's narrative away from vehicle deliveries and toward
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  robotaxi's full Self driving software and humanoid robots.
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  Now we can argue that fundamentals do not matter for a
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  stock like Tesla, which is a bet on mobility, robotics and AI,
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  rather than a traditional automaker like Ford or
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  Chevrolet. Something like that.
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  Tesla launches robotaxi service in Austin in June 2025, and Elon
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  Musk has promised millions of autonomous vehicles on the road
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  just just a few years. He's been making similar
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  promises for years, though without actually delivering
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  anything. We know the Austin thing that's
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  happening right now and some small turnouts for the robo
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  taxis, but millions of these things in I think he said two
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  years. I don't see that happening.
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  We there's no way but investors, they keep buying the story.
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  The stock trades evaluations that assume future revenue
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  streams then do not yet exist. Now the the Tesla consensus
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  published came from 20 sell side analysts.
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  This includes Goldman Sachs, Morgan Stanley, Barclays,
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  Deutsche Bank, Wedbush and UBS among a lot of others.
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  Tesla was careful to note that does not endorse any
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  information, recommendations or conclusions made by these
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  analysts. That is just a standard legal
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  language. The important part is that Tesla
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  chose to host this data and its own website rather than let
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  third party aggregators control the narrative.
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  The press release also included energy storage deployment
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  estimates, and we expect Tesla to deploy 13.4 GW hours of
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  battery storage systems in Q4 now that that business has been
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  growing even as vehicle sales decline.
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  Full year energy storage deployments are projected at
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  45.9 GW hours for 2025, rising to 63.9 GW hours in 2026 and
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  87.7 GW hours in 2027. The energy business does not get
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  as much attention as vehicles, but is becoming a larger part of
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  Tesla because it's not the first time that Tesla has lost access
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  to federal EV tax credits. The company hit the 200,000
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  vehicle cap under the old rules in 2018, which triggered a phase
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  out that ended the credit entirely by January 2020.
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  Now Tesla survived that transition.
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  They're here still, and the difference this time is the
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  competitive landscape. In 2020, Tesla held a dominant
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  position in the USEV market with a few serious rivals.
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  Today, Chevrolet, Ford, others are bringing affordable E VS to
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  market, and Chinese manufacturers are pushing hard
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  in Europe and Asia, where Tesla can't compete in.
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  BYD unveiled technology earlier this year that allows its cars
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  to charge in just a few minutes. Tesla's line is is aging.
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  The technology just isn't keeping up.
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  And Model 3 launched in 2017. The Model Y launched in 2020.
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  And apart from the Cyber truck, which has struggled to find
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  mainstream appeal and has been recalled 8 times, Tesla has not
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  introduced a truly new product in years.
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  And that brings us back to Q4 delivery consensus.
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  Tesla published those numbers because it knows the actual
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  results will be weak, and by setting expectations low, the
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  company makes it easier to claim a win.
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  Even if deliveries fall 15% year over year.
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  The strategy has limits. A second consecutive year of
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  declining sales is hard to spin as growth, and Tesla deliver
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  fewer cars in 2025 than it did in 2024 and fewer in 2024 than
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  it did in 2023. The cheaper standard models have
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  not reversed the trend. The incentives have not reversed
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  the trend. Analysts expect sales to recover
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  in 2026 as the standard versions help test the compete in a post
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  subsidy market. But the recovery isn't
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  guaranteed. The question is whether the robo
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  taxi and AI narrative can sustain the stock price while
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  the core business shrinks. And for now, investors seem to
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  believe it can. Tesla stock is up even as
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  deliveries fall. That bet will eventually be
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  tested. The numbers test the release
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  this week suggest the test is getting closer.
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  Hey, thank you so much for listening today.
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