Tesla(US:TSLA) The Motley Fool·2026-01-07 03:00Core Viewpoint - Tesla's electric vehicle business faced significant challenges in 2025, with declining deliveries and increased competition, but investors are optimistic about the company's future potential in robotaxis and humanoid robots [1][5][10]. EV Deliveries - Tesla reported 418,227 EV deliveries for Q4 2025, missing Wall Street's expectation of approximately 426,000, marking a nearly 16% decline year over year [3]. - For the entire year, Tesla delivered 1.64 million vehicles, a decrease of about 9% from 2024 [3]. - The majority of Q4 deliveries (97%) came from the Model 3 Sedan and Model Y SUV, with minimal deliveries from Model S, Model X, and Cybertrucks [4]. Market Conditions - The decline in deliveries is attributed to the elimination of the $7,500 federal EV tax credit under the Trump administration, which was a significant incentive for EV purchases [5]. - Tesla faces increased competition globally, notably from BYD, which has surpassed Tesla as the world's largest EV maker [5]. Future Prospects - Investors are focusing on Tesla's emerging robotaxi fleet and Optimus humanoid robots as potential growth drivers [2][5]. - Tesla soft-launched its self-driving robotaxis in Austin and San Francisco, with plans to expand to five new cities soon [5]. - Some robotaxis in Austin are reportedly operating without supervision, indicating progress towards full autonomy [6]. Financial Outlook - Analysts predict that Tesla's robotaxi operations could expand to 30 cities by the end of 2026, significantly impacting the stock's value [7]. - Cathie Wood of Ark Invest has set a price target of $2,600 for Tesla by 2029, suggesting substantial upside potential driven by the robotaxi business, which could account for 90% of the company's enterprise value and earnings by that time [8]. Current Market Data - Tesla's current market capitalization stands at $1.5 trillion, with a share price around $432.72, reflecting a high valuation of over 200 times forward earnings [9][10].