Tesla Stock Falls as Q3 Deliveries Miss High Expectations

Tesla’s stock took a notable hit on Wednesday following the company’s release of its third-quarter vehicle delivery report, which fell short of the most optimistic expectations from Wall Street analysts. Despite delivering 462,890 electric vehicles in the quarter—slightly above the average consensus of 462,000—the numbers failed to meet the high-end estimates of some of the more bullish market observers, particularly from Barclays and UBS, which had forecast deliveries closer to 470,000 units.

By midday, Tesla shares were down more than 3%, trading around $250. This decline marked the worst single-day performance for the stock in almost a month. For a company as large as Tesla, whose stock price often moves sharply in response to vehicle delivery numbers, this outcome came as a disappointment to investors who had hoped for stronger results.

While Tesla did report year-over-year delivery growth of 6%—an improvement over the declines of 9% and 5% in the first and second quarters of 2024, respectively—investor sentiment remained subdued. The third-quarter numbers showed a return to annual growth, but the pace of that growth was slower than many had hoped, and the gap between Tesla’s actual deliveries and the most aggressive forecasts raised concerns about the company’s ability to maintain its momentum amid increasing competition in the electric vehicle (EV) market.

Tesla’s stock is known for its volatility, which is often driven by delivery data. When the company released its second-quarter numbers in July, for example, the stock jumped by 10% in a single day. However, this time around, the delivery figures failed to spark the same level of enthusiasm. Year to date, Tesla’s stock is down about 0.5%, a sharp contrast to the broader market’s performance. The S&P 500, for example, has gained about 35% during the same period. Tesla’s performance also contrasts with other U.S. automakers, with mixed results across the industry. Ford, for instance, has seen a 6% decline year-to-date, including dividends, while General Motors has posted a 40% increase. Meanwhile, Rivian, a relatively newer player in the EV space, has experienced a steep 56% decline.

Despite the slower-than-expected delivery growth, analysts and investors continue to keep a close eye on Tesla’s overall trajectory. The company is still viewed as a bellwether for the EV market, and its ability to scale production and meet increasing demand is seen as crucial to its long-term success. According to FactSet data, consensus estimates for Tesla’s fourth-quarter deliveries stand at 485,000 vehicles. If the company meets this target, it would bring its total deliveries for 2024 to 1.78 million units. While this would represent a strong finish to the year, it would still fall short of Tesla’s 2023 total of 1.81 million vehicles, potentially marking the first annual decline in deliveries since at least 2015.

Tesla’s Chief Executive Officer, Elon Musk, has downplayed concerns about short-term delivery fluctuations, instead focusing on the company’s long-term growth potential. Musk has frequently pointed to Tesla’s ongoing efforts in autonomous driving technology as a key driver of future growth. He has described Tesla as being positioned between two major waves of growth, with the first wave driven by electric vehicle production and the next wave set to be powered by advances in autonomous driving.

In a note to clients, Wedbush analyst Dan Ives acknowledged the disappointment surrounding Tesla’s third-quarter delivery numbers. “Investors walked away from the delivery numbers expecting more,” Ives wrote. However, he maintained a bullish outlook on the company, noting that the in-line deliveries were still a “mini step in the right direction.” Ives remains optimistic about Tesla’s long-term prospects, especially given its leadership in the EV market and its investments in emerging technologies like autonomous driving.

Looking ahead, Tesla has several important events on the horizon that could provide further clarity on the company’s performance and future direction. On October 10, Tesla is scheduled to host a “robotaxi” day, during which the company will showcase its advancements in driverless cab technology. This event is expected to shed more light on Tesla’s autonomous driving initiatives, which Musk has described as a critical component of the company’s future growth strategy.

In addition to the robotaxi event, Tesla is also set to report its third-quarter earnings on October 23. This earnings report will be closely scrutinized by investors and analysts alike, as it will provide a deeper look into Tesla’s financial performance and its ability to manage costs and scale production amid growing competition. The company’s profitability, cash flow, and any updates on production timelines for new models, including the much-anticipated Cybertruck, will also be key areas of focus during the earnings call.

Tesla’s ability to navigate the challenges of increasing competition and slowing demand in some markets will be crucial as the company moves forward. While Tesla remains the dominant player in the global EV market, it faces growing pressure from both traditional automakers and new entrants in the electric vehicle space. Companies like Ford and General Motors have ramped up their EV production efforts, while newcomers like Rivian and Lucid Motors are also vying for a share of the market.

As Tesla continues to expand its production capacity and develop new technologies, the company’s long-term success will depend on its ability to maintain its leadership position in the EV industry while also delivering on its promises of innovation in areas like autonomous driving and energy storage. For now, though, the company’s third-quarter delivery miss has raised questions about its near-term growth prospects and whether it can meet the high expectations of investors and analysts.