Analyst Sees Tesla Results as ‘Better Than Feared’ Despite Delivery Shortfall

Tesla’s fourth-quarter and full-year 2025 production and delivery figures fell slightly below internal goals but roughly matched Wall Street estimates, prompting veteran Wedbush analyst Dan Ives to summarize the outcome as “better than feared.” The report, released on 4 January 2026, comes as the electric-vehicle maker contends with the loss of a key U.S. tax credit and ongoing softness in European demand.

Quarterly performance

In the three months ended 31 December 2025, Tesla delivered 418,227 vehicles, about 1.1 % under the company-compiled analyst consensus of 422,850 and 3.4 % below the 432,810 projection from Visible Alpha. Production totaled 434,358 vehicles, missing the 470,780 figure cited by Bloomberg by 7.7 %. Although the headline numbers fell short, the margin between production and deliveries remained narrow, easing concerns over excess inventory.

The energy division provided a notable offset. Tesla deployed 14.2 GWh of energy storage during the quarter, a record that exceeded the company’s compiled consensus of 13.4 GWh by almost 6 %. The performance reinforces management’s view that energy, artificial intelligence initiatives and autonomous-driving software can balance volatility in the core vehicle business.

Full-year results

For 2025, Tesla delivered 1,636,129 vehicles, essentially in line with its 1,640,752 consensus and close to third-party estimates of roughly 1.65 million. Production reached 1,654,667 vehicles, leaving a modest surplus over deliveries. Energy-storage deployments surged to 46.7 GWh for the year, underlining management’s emphasis on diversification beyond passenger cars.

Quarter-by-quarter trajectory

The 12-month period was uneven. Deliveries in the first quarter dropped to 336,681 units amid Model Y line conversions that disrupted output. The second quarter improved to 384,122 units, though the recovery remained gradual. A rush to secure the United States’ $7,500 electric-vehicle tax credit ahead of its expiration drove third-quarter deliveries to 497,099 units, the year’s strongest performance. With the incentive no longer available, fourth-quarter deliveries retreated to the 418,000-unit level.

Analyst reaction and valuation

Ives retained a buy rating on Tesla and reiterated a $600 price target, the highest among major brokerage houses. Shares closed near $438 after the report, down approximately 8 % over the preceding week but up 16 % for all of 2025. Since 18 December 2025, the stock has fallen around 9.4 %. Even at current levels, Tesla trades at roughly 268 times projected non-GAAP forward earnings, a valuation bears describe as elevated.

Other institutions remain divided. Deutsche Bank holds a $500 target with a positive stance, while Bank of America raised its objective to $471 yet stayed neutral, citing concerns over valuation. Goldman Sachs and Morgan Stanley sit just below the market at $420 and $425, respectively, each emphasizing robotaxi development as an early-2026 catalyst. UBS continues to recommend selling the stock, assigning a $247 target on the view that expectations for autonomous driving are priced in too aggressively.

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Competitive landscape

Competition intensified throughout 2025. China’s BYD sold 4.6 million vehicles last year, including nearly 2.26 million battery-electric units, according to data reported by Reuters. The total eclipsed Tesla’s global deliveries and underscored the scale advantage emerging in Asia. Additional Chinese manufacturers—Geely, NIO and Li Auto—also posted robust year-end numbers, highlighting the pressure on Tesla to maintain share while expanding into new revenue streams such as energy storage and software-based services.

Key challenges and opportunities

Tesla enters 2026 without the benefit of the U.S. federal credit that boosted third-quarter demand and with lingering weakness in Europe. Management is therefore positioning artificial intelligence, Full Self-Driving software, the Optimus humanoid robot and prospective robotaxi offerings as primary growth drivers. The energy segment’s record quarter supports that strategy, providing evidence of revenue diversification just as vehicle margins face increased competition and cost headwinds.

Looking ahead, analysts will watch whether Tesla can return to delivery growth despite the incentive lapse and whether autonomy-related initiatives can progress from demonstration to meaningful revenue. The company’s next detailed update is expected with fourth-quarter earnings, when executives typically provide commentary on production plans, margin outlook and capital allocation priorities.

Crédito da imagem: Allison Robbert/Getty Images