Tesla EV Deliveries Slide in 2025: Time to Sell TSLA Stock?

Core Insights - Tesla (TSLA) experienced a decline in annual deliveries for the second consecutive year in 2025, with a total of approximately 1.64 million vehicles delivered, down over 8% year-over-year [3][9]. - The fourth quarter of 2025 saw Tesla sell 418,227 vehicles, a 16% decrease compared to the same quarter in 2024, primarily due to expiring EV tax credits, aging models, and increased competition from companies like BYD [3][4][9]. - Despite challenges in the core EV business, CEO Elon Musk is focusing on autonomous vehicles and artificial intelligence as future growth engines, although significant revenue from these areas is expected to be years away [2][18]. Delivery Performance - In 2025, Tesla's deliveries totaled roughly 1.64 million vehicles, which included 1.58 million units of Model 3/Y and 50,850 other models, marking a decline from nearly 1.8 million vehicles sold in 2024 [3][9]. - The year-over-year decline in deliveries accelerated in 2025, with a drop of more than 8%, compared to a 1% decline in 2024 [4][9]. - Tesla lost its position as the leading EV manufacturer to BYD, which recorded sales of 2.26 million BEVs in 2025, reflecting a 28% increase year-over-year [4]. Future Growth Areas - Tesla is investing heavily in Full Self-Driving (FSD) technology and robotaxis, which Musk considers the most valuable future segments for the company [5][18]. - The robotaxi service, operational in cities like Austin and San Francisco, is set to expand to additional locations, with the FSD fleet surpassing 7 billion total miles [5][6]. - Tesla's Energy Generation and Storage business is thriving, with a record deployment of 14.2 GWh of energy storage products in Q4 2025 and a 48.7% increase in full-year deployments to 46.7 GWh [10]. Financial Performance and Valuation - Tesla's shares have underperformed the industry over the past year, trading at more than 13.75 times forward 12-month sales, significantly above the industry average [13][14]. - The Zacks Consensus Estimate for Tesla's 2025 revenues and EPS indicates a year-over-year contraction of 3% and 33%, respectively, but suggests improvements of 11.6% and 42.4% for 2026 [16]. - Despite the delivery slowdown, Tesla's ongoing advancements in autonomous driving, robotaxis, and energy storage could reshape its long-term earnings mix, making it a high-risk, high-reward investment [18][19].