Tesla shares have fallen about 8% this year despite gains across major U.S. stock indexes, underscoring investor concern that weak electric-vehicle demand continues to weigh on the company’s near-term outlook. Attention is now turning to July 2, when Tesla is expected to report second-quarter electric-vehicle deliveries, a key signal for whether its EV turnaround is gaining traction.
While investors remain excited about future product platforms such as the Cybercab robotaxi and the Optimus humanoid robot, EV sales still represent more than 70% of Tesla’s total revenue, meaning delivery trends remain central to how Wall Street prices the stock.
Key takeaways
- Tesla shares are down roughly 8% year-to-date as EV demand concerns persist.
- Investors will focus on July 2 delivery results, with Wall Street expecting about 400,000 EVs in the second quarter.
- EV competition is intensifying, particularly from low-cost offerings in China and expanding global strategies.
- Even a delivery beat may not translate into stock upside given Tesla’s very high valuation relative to broader market benchmarks.
What drove the focus on Tesla ahead of deliveries
According to the delivery data cited in the report, Tesla delivered 1.79 million cars in 2024, down 1% year over year. In 2025, deliveries fell more sharply, with the company delivering 1.63 million vehicles—down 9% from the prior year.
The report also notes that Tesla’s competitive landscape has become more challenging as automakers increase their pressure in both China and overseas. For investors, the concern is not just current deliveries, but whether the company can stabilize EV sales long enough for margins and earnings to recover.
EV sales trends, margins, and early signs of stabilization
The report said Tesla’s automotive revenue declined 10% in 2025, contributing to a 3% drop in overall revenue. It added that aggressive EV price cuts used to support demand compressed profitability, with the report citing a 47% decline in earnings.
At the same time, the report pointed to early improvements. Tesla’s first-quarter 2026 EV deliveries were 358,023, representing a 6% increase versus the year-ago period. It further stated that if Tesla delivers around 400,000 cars in the second quarter—matching Wall Street’s consensus estimate—that would imply a 4% year-over-year increase, marking a second straight quarter of growth.
Competition outside Tesla is getting tougher
The report highlighted pressure from both established and fast-growing EV players. It cited Geely Automotive Group, saying its New Energy Vehicle sales—battery electric vehicles and plug-in hybrids—rose 90% to nearly 1.7 million units in 2025, with continued growth expected in 2026. The report also said Geely plans an aggressive expansion in Europe, a major region for Tesla.
It also cited BYD as a key competitor, noting BYD sold more than 2.2 million EVs worldwide in 2025, topping Tesla in the category for the year. While the report described BYD’s 2026 start as sluggish, it argued that BYD’s dominance in the affordable segment remains a structural challenge for Tesla’s EV pricing strategy.
Why even better deliveries may not be enough for the stock
Even if Tesla meets expectations for second-quarter deliveries on July 2, the report argued that the stock could still struggle to rally meaningfully. The analysis cited Tesla’s trailing-12-month earnings of $1.09 per share and a price-to-earnings ratio of 366, which it said is more than 10 times higher than the Nasdaq-100’s P/E of 34.4.
That valuation gap matters because, as the report framed it, investors may already be pricing in significant progress from Tesla’s future platforms. If deliveries stabilize but earnings and margins fail to improve at the pace the market expects, the downside risk can remain elevated for highly valued stocks.
The report also addressed the longer-term narrative behind Tesla’s product pipeline. It said CEO Elon Musk previously guided that the Cybercab entered production in April, but that the company is awaiting broad regulatory approval for full self-driving software, meaning the robotaxi may not be immediately ready for fully autonomous ride-hailing services. It added that Musk is expected to provide updated guidance around July 2, along with commentary on Optimus.
According to the report, Musk has suggested full self-driving approval could expand across about a dozen U.S. states by the end of 2026, and he is also likely to update investors on Optimus. The report stated Optimus is scheduled for mass production at the end of this year, beginning at Tesla’s Fremont, California, facility, which it said has capacity to build 1 million units annually.
Bigger picture: What to watch after July 2
Going into July 2, the delivery figure will likely remain the immediate catalyst, especially in determining whether Tesla can sustain growth after a period of declining EV volumes and pressured profitability. Investors should watch not only whether Tesla meets the consensus delivery expectation, but also how the company frames the path toward higher-margin growth as competition intensifies.
Beyond deliveries, the next key focus will be guidance around autonomous driving readiness for the Cybercab and updated milestones for Optimus, alongside broader market sensitivity to EV demand trends and the implications for Tesla’s margins and earnings trajectory.
