Tesla, Inc. (TSLA.US) Q4 delivery volume is lower than expected after last week's update, with annual sales decreasing for the second consecutive year. The energy business is one of the few bright spots.

Tesla, Inc. (TSLA.US) announced its car production and delivery data for the fourth quarter of 2025 on Friday. After the financial report was released, the company's stock price rose over 1%. The data shows that Tesla, Inc. delivered a total of 418,227 cars in the fourth quarter, with a production of 434,358 cars; the total delivery for the year was 1.64 million cars, with an estimated production of around 1.65 million cars. In comparison, Wall Street's previous expectation for fourth-quarter deliveries was around 426,000 cars, while in the company's consensus expectations released on December 29 last year, analysts surveyed predicted a 15% year-on-year decrease in deliveries to 422,850 cars for the quarter. Comparing year-on-year, Tesla, Inc.'s fourth-quarter deliveries for 2025 decreased by approximately 16% from the 495,570 cars in the same period of 2024, while production in the quarter also decreased by 5.5% compared to the 459,445 cars in the same period of the previous year. Deliveries are the closest indicator to "sales" for Tesla, Inc., but the company has not provided a precise definition in its shareholder documents. At the annual level, Tesla, Inc.'s 2025 deliveries decreased from 1.79 million cars in 2024 to 1.64 million cars, an 8.6% year-on-year decrease, marking the second consecutive year of decline. While the electric vehicle core business is under pressure, Tesla, Inc.'s energy business continues to grow. The company stated that in the fourth quarter, it deployed 14.2 gigawatt-hours of battery energy storage products, higher than the record-breaking 12.5 gigawatt-hours in the previous quarter. These energy storage systems include batteries for home backup power and large-scale storage solutions for data centers and utilities. Tesla, Inc. plans to announce the complete financial performance for the fourth quarter on January 28. Changes in the competitive market environment are also important background for the decline in deliveries. Tesla, Inc. is facing fierce competition from Chinese BYD Company Limited, Korean Kia and Hyundai, and European Volkswagen, among others. Meanwhile, U.S. President Trump decided to terminate federal electric vehicle purchase incentives early on September 30, which also impacted Tesla, Inc. sales. The policy's early expiry prompted some consumers to move forward their vehicle purchases to the third quarter, affecting not only Tesla, Inc., but also other car companies. In fact, Tesla, Inc. faced multiple challenges at the beginning of 2025. CEO Musk took the lead in the efficiency department of the U.S. government in the first quarter, after strongly supporting Trump's return to the White House, pushing for a reduction in federal workforce size. In addition, Musk openly supported the far-right anti-immigrant party AfD in Germany and recently called for the abolition of the EU. These statements have generated continued consumer backlash in Europe and the U.S., even though Tesla, Inc. introduced a cheaper Model Y SUV version in October, sales performance has not fully recovered. Despite the pressure on fundamentals, Tesla, Inc.'s stock price rebounded significantly in the second half of 2025, with a cumulative increase of about 40% in the third quarter and reaching a historical high in mid-December. Musk personally increased his stake in the company by about $1 billion in September. In November, shareholders also approved a new compensation plan worth up to $1 trillion, giving Musk more shares and greater control. The plan had previously sparked controversy with critics pointing out that it did not require Musk to commit minimum working hours or restrict his political activities. Regionally, Tesla, Inc.'s market share in Europe has significantly declined. Since the company did not disclose delivery data by region, data from the European Automobile Manufacturers' Association has become an important reference. The data shows that Tesla, Inc.'s new car registrations in Europe in the first 11 months of 2025 declined by 39% year-on-year, while BYD Company Limited saw a 240% increase in registrations in Europe during the same period. Overall, the acceptance of pure electric vehicles continued to increase in the European market in 2025, with pure electric vehicles accounting for about 16% of new car sales that year. Some analysts believe that the more affordable Model Y Standard Range version introduced by Tesla, Inc. in October is expected to help the company stabilize and even regain some market share in the coming quarters. Analysts at Canaccord Genuity pointed out in a report last week that the popularity of electric vehicles in emerging markets such as Thailand, Vietnam, and Brazil is increasing, and strong consumer interest may provide Tesla, Inc. with long-term upside potential, although it still faces fierce competition from Chinese car companies globally. In addition to BYD Company Limited, companies like Xiaomi and Geely in China are also becoming new direct competitors to Tesla, Inc. However, the core story that Tesla, Inc. is presenting to investors is no longer limited to electric vehicle sales, but what Musk calls "sustainable prosperity." This vision includes his long-promised autonomous ride-sharing taxis, as well as the humanoid Siasun Robot & Automation project. Musk stated that these Siasun Robot & Automation could work in factories in the future, and even take on roles such as nannies, security guards, and even surgical procedures, becoming an important support for Tesla, Inc.'s long-term valuation.