Tesla’s Weaker Delivery Outlook Sparks Forecast of Second Year of Sales Decline
Elon Musk's electric empire hits a speed bump—analysts see red where there was once only green.
The Numbers Don't Lie (This Time)
Forget moonshots and robotaxis. The core business—moving metal—is flashing warning signs. Tesla's own guidance points to softer deliveries ahead, a signal the market can't ignore. Wall Street's crystal ball, rarely unanimous, now agrees: this could mark year two of shrinking sales. Growth story? More like a cautionary tale.
Execution Over Hype
The vision is grand, but the quarterly report is grounded. Production challenges, fierce competition, and the simple law of large numbers are colliding. You can't hype your way past a delivery shortfall. The narrative is shifting from infinite potential to hard, operational reality.
The Street's Verdict
Analysts are sharpening their pencils—and their critiques. A second year of decline would reshape the Tesla investment thesis entirely. It's a stark reminder that in the end, even the most disruptive companies are judged by the oldest metric in the book: selling more stuff than you did last year. Somewhere, a traditional auto CFO is quietly smiling into their spreadsheet.
Second year of declining sales expected
Things aren’t looking up for the year either. The company is on track for its second year in a row of declining sales. Analysts figure Tesla will deliver about 1.6 million vehicles total this year, which is over 8% less than last year.
Sales took a hit early this year when Tesla had to shut down production at its plants to retool the lines for the redesigned Model Y. That’s their most popular car. Around that same time, CEO Elon Musk got involved with the TRUMP administration, which stirred up plenty of controversy.
Third quarter was actually a bright spot. Deliveries jumped to a record high as U.S. buyers rushed to get electric vehicles before the $7,500 federal tax credits went away at the end of September.
When those incentives disappeared at the start of this quarter, Tesla tried to soften the blow by rolling out stripped-down versions of the Model Y SUV and Model 3 sedan. Both came in under $40,000.
Even with sales dropping, Tesla’s stock is still up for the year. Shares climbed 14% through Monday, though that trails the S&P 500’s 17% gain.
Massive battery supply contract collapses
On another front, there’s trouble with a supplier. L&F Co., a South Korean company, made an announcement Monday about a contract with Tesla that pretty much disappeared. The deal was originally worth 3.83 trillion won, which comes out to $2.67 billion. It got reduced to 9.73 million won. That’s a 99% cut. The company’s filing blamed it on supply quantity changes.
What went wrong? The Cybertruck kept getting pushed back, so hardly any material ended up being delivered. Customers were going for other Tesla vehicles, the Model 3 and Model Y mostly. There were other factors at play too. The elimination of Inflation Reduction Act subsidies was one of them.
L&F released a statement. They said the revision couldn’t be helped because of shifts in the global EV market and how battery supplies work. Their main high-nickel product shipments haven’t been affected, they noted. Deliveries to big Korean battery cell manufacturers are continuing as normal.
The company supplies others besides Tesla. LG Energy Solution is one of them. L&F’s stock took an 11% hit in Seoul trading Tuesday. For the year, shares are up around 16%. That looks small next to the Kospi Index, which jumped 76%.
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