Tesla Q3 Deliveries Reach Record Levels: Is TSLA Stock a Buy?

Core Insights - Tesla delivered a record 497,099 electric vehicles (EVs) in Q3 2025, marking a 7.4% year-over-year increase and exceeding estimates of 435,370 units [1][6] - The strong demand in Q3 was likely driven by the expiration of the $7,500 EV tax credit, prompting customers to purchase vehicles before the deadline [1] - Tesla's Energy Generation and Storage business is experiencing rapid growth, with 12.5 GWh of energy storage products deployed in Q3, achieving the highest margins for the company [4][6] Tesla's Sales Performance - Tesla's Q3 deliveries included 481,166 Model 3/Y and 15,933 other vehicles, representing the highest quarterly total in the company's history [1] - In Europe, Tesla faced declining demand, with sales in the EU dropping 37% year-over-year in August, attributed to increased competition and backlash against Elon Musk's political activities [2] - In China, Tesla's August deliveries fell 9.9% year-over-year but increased over 40% from July, with expectations for stronger performance in September following the launch of the Model Y L [3] Energy Business Growth - The Energy Generation and Storage segment is now Tesla's highest-margin business, driven by strong demand for Megapack and Powerwall products [4][5] - Tesla's energy solutions are increasingly being adopted by utilities to stabilize the grid, especially as U.S. grids face strain [5] AI and Robotics Developments - Tesla is making significant strides in artificial intelligence (AI), autonomous driving, and robotics, with robotaxi services expanding across multiple states [9] - The latest Full Self-Driving (FSD) version was launched recently, and the Optimus humanoid robot is expected to enter mass production next year [10] Stock Performance and Valuation - Tesla's shares rose approximately 37% last month, outperforming industry peers, driven by Musk's commitment signals and a proposed $1 trillion pay package [11][14] - The proposed compensation plan is tied to ambitious milestones, including a target of $400 billion in adjusted EBITDA by 2035 and selling 20 million vehicles annually [16] - Despite recent optimism, Tesla's valuation appears stretched, trading at a forward sales multiple of 13.81, significantly higher than industry averages [17] Future Outlook - Through the first three quarters of 2025, Tesla sold over 1.2 million vehicles, but this represents a year-over-year decline [18] - Concerns remain regarding Tesla's demand trajectory, particularly in international markets, amid rising competition and long-term projects that may take years to yield results [19]