Tesla Vehicle Delivery Trends Are Concerning, and Shares May Be Overvalued

Stock Performance and Valuation - Tesla stock has declined nearly 2% year-to-date in 2025 due to disappointing vehicle delivery numbers [2] - The company delivered 496,000 vehicles in Q4 2025, only a 2% year-over-year increase, and total annual deliveries of 1.789 million units, down from 1.81 million in 2023 [2] - Tesla's high valuation demands rapid growth, which the company is not currently delivering [3] Delivery Growth Trends - Tesla's Q4 2025 year-over-year vehicle delivery growth rate of 2% was 4 percentage points lower than the 6% growth in Q3 [4] - The Q4 delivery number was below analyst consensus estimates by approximately 9,000 units [4] Market Challenges - Higher interest rates have impacted affordability, leading consumers to hold onto their cars longer, particularly in the US [5] - Tesla is currently between two major growth waves, with the next wave expected to be driven by advances in autonomy and new products [6] Energy Storage Business - Tesla's energy storage business deployed 6.9 GWh in Q3 2025, a 75% year-over-year increase, and reached a record 11 GWh in Q4 [7] - The energy generation and storage business represents about 9% of Tesla's quarterly revenue [7] Autonomous Driving - Tesla's supervised "self-driving" software has been used for over 2 billion miles as of Q3 2025 [7] - The company aims to transition to unsupervised self-driving software, which could enable the launch of an autonomous driving robotaxi service [7] Future Outlook - Tesla's current valuation may be justified if the company successfully executes its growth plans, particularly in energy storage and autonomous driving [8] - However, unexpected challenges such as interest rate increases or higher-than-anticipated costs could impact investor returns [8]