Tesla Shares Rise on Stronger-Than-Expected Q3 Deliveries
Automaker surpasses Wall Street estimates, driven by a rebound in European demand and increased exports from China.
Tesla shares climbed 5% Friday after the electric vehicle maker reported third-quarter deliveries that exceeded Wall Street expectations. The company delivered 486,532 vehicles during the July-September period, surpassing the average analyst estimate of 456,896 vehicles.
This performance was bolstered by a significant demand rebound in Europe, which helped offset the impact of diminished U.S. tax incentives and intensified competition in China. Exports from Tesla's Shanghai factory nearly doubled in July and August, contributing to the overall delivery numbers.
In Europe, vehicle registrations for Tesla rose by approximately two-thirds through August, a notable increase following a slump last year partly attributed to backlash against CEO Elon Musk's public statements. In France, the Tesla Model Y became the best-selling car of any type for the first time.
The strong quarterly figures suggest Tesla's core automotive business may be stabilizing after two consecutive years of declining annual sales. Investors have increasingly focused on Musk's long-term ambitions in areas such as artificial intelligence, robotaxis, and humanoid robots, which are crucial to the company's approximately $1.40 trillion valuation, even though vehicle sales remain its primary revenue source.
Analysts have revised their full-year forecasts upward, now anticipating 1.82 million deliveries in 2026, an increase from the 1.65 million projected in June. Morningstar analyst Seth Goldstein attributed the positive trend to the Full Self-Driving (FSD) software, calling it a "differentiator that drives consumers to choose Tesla over other autos."
The rollout of Tesla's FSD software in Europe is expected to further boost sales, with the system now approved in eight countries. Additionally, Tesla's robotaxi service is expanding, with operations in Texas and Florida now running without a safety supervisor. The company recently added its purpose-built Cybercab to its robotaxi service in Austin.
However, Tesla produced 464,391 vehicles during the third quarter, falling below the production estimate of 486,761 vehicles. The company needs to deliver at least 311,448 vehicles in the fourth quarter to avoid a third consecutive annual decline in deliveries.
Previously, Tesla had noted a strong demand entering the third quarter, with Finance Chief Vaibhav Taneja stating in July that the company "exited Q2 with our largest order backlog since 2023."