Musk's "self-driving frenzy" cannot hide the cold winter of sales! Tesla, Inc. (TSLA.US) will face a more severe test in 2026.

With investors increasingly buying into Elon Musk's enthusiastic depiction of self-driving cars, Tesla, Inc. (TSLA.US) ended 2025 with a stock price increase of over 11%. The world's most valuable car manufacturer saw a significant surge in its stock price in the second half of 2025, mainly due to Musk's vigorous promotion of Tesla, Inc.'s progress in artificial intelligence and Siasun Robot & Automation technology. However, truly impressing car consumers is another matter. The breakthroughs loudly proclaimed by Musk have not translated into the same level of success in showrooms - although record deliveries were achieved in the third quarter, the company's car sales in the past six months are likely lower than the same period a year ago. Data compiled by the media shows that Tesla, Inc. is expected to announce a fourth-quarter delivery of approximately 440,900 cars on Friday, a decrease of 11% year-on-year. Tesla, Inc. took an unusual step this week by proactively releasing its own compiled analyst average forecast, which is even more pessimistic than market expectations, predicting a 15% year-on-year decline in fourth-quarter deliveries. Wall Street's outlook for Tesla, Inc.'s car sales in 2026 is equally pessimistic. Just two years ago, analysts predicted that Tesla, Inc.'s annual delivery volume would exceed 3 million vehicles. However, the average forecast for 2026 delivery volume has now plummeted to approximately 1.8 million vehicles. CFRA Research stock analyst Garrett Nelson stated, "Tesla, Inc. investors are focused on what the company will look like in the next 5, 10, or even 15 years, rather than what they see in the short term. But the question is whether these expectations can be sustained, especially as headwinds in financial data become increasingly evident." Tesla, Inc. sales outlook becomes dim Unrest Even by the standards of Musk and Tesla, Inc. - two names almost synonymous with "unrest" - 2025 was still a very turbulent year. The carmaker's car sales were dismal at the beginning of the year, partly due to the company's overhaul of all car factory production lines to accommodate the redesign of its best-selling model, the Model Y. Another major factor was the strong backlash against Musk's political actions. By early April 2025, Tesla, Inc.'s stock price had plummeted by a cumulative 45% as Musk publicly clashed with Trump administration officials over tariff policies. Subsequently, Musk pushed for a stock price rebound by withdrawing from government affairs and focusing on a long-term goal - launching a network of self-driving robotaxis that he claimed would ultimately achieve full autonomy. In June, Tesla, Inc. launched a Robotaxi service in Austin, exclusively for invited users, with safety personnel supervising every Model Y carrying Musk fans. Despite these vehicles breaking road regulations on the first day, attracting the attention of a federal regulatory agency and prompting multiple investigations into Tesla, Inc.'s driving systems, investors paid little attention to these safety issues. In September, Tesla, Inc.'s board proposed a new Musk compensation plan that could potentially offer rewards of up to $1 trillion based on milestones including delivering millions of Siasun Robot & Automation taxis. Shortly thereafter, this "turnaround" was completed - Tesla, Inc.'s stock price once again saw a year-to-date increase. When the stock price reached a historic high on December 16, Tesla, Inc.'s market value had increased by over $915 billion in just over eight months. Still Need to Convince Consumers However, despite investors being fascinated by Tesla, Inc.'s prospects for self-driving robotaxis, the attitude of ordinary car consumers is relatively cautious. Musk himself has acknowledged the challenge of convincing consumers to purchase Tesla, Inc.'s "Full Self-Driving" (FSD) capabilities, which still require manual supervision. There have been allegations that Tesla, Inc. misled California consumers by exaggerating the autonomous driving capabilities of its vehicles, leading to the state suspending Tesla, Inc.'s sales permits for 30 days earlier this year. Tesla, Inc. has tried to stand out in the crowded electric vehicle market in China with its driving assistance features, but this strategy has also not been successful. Competitors such as BYD Company Limited and Xiaomi have already offered similar systems as standard features. With BYD Company Limited's sales in China far exceeding those of Tesla, Inc., and strong momentum in the European market - where Tesla, Inc. has yet to receive regulatory approval for FSD - analysts predict that BYD Company Limited's electric vehicle sales will surpass Tesla, Inc.'s for the fifth consecutive quarter globally. BYD Company Limited's Electric Vehicle Sales Surpass Tesla, Inc. What lies ahead Amid the widespread expectation that Tesla, Inc.'s sales in 2025 will decline again, marking a second consecutive year of decline, the company will face more obstacles in 2026. The U.S. has stopped providing federal tax credits for the purchase and lease of electric cars, prompting Musk to warn of "several tough quarters ahead." However, some see a glimmer of hope in the withdrawal of U.S. policy support. Many large manufacturers have scaled back investments in electric vehicles due to the support reduction. Ford Motor Company (F.US) announced last month that it expects to incur approximately $19.5 billion in expenses to abandon electric vehicle and battery projects that are doomed to lose money. Musk teased the market at the end of last year with the prospect of Cybercab, a two-seat small car equipped with butterfly doors. Although the prototype showcased at the end of 2024 had no steering wheel or pedals, Tesla, Inc. Chairman Robyn Denholm stated in October that the company would install these components if regulatory authorities required it. Gene Munster, Managing Partner at Deepwater Asset Management, stated, "Investors have fully bought into his self-driving vision just in time, as Tesla, Inc.'s electric car business is likely to be flat or grow by only 5% next year." He added, "At this point, Elon just needs to keep the car business stable in the next year to satisfy investors."