Rare move! Tesla announces analyst predictions: Q4 delivery volume may decline by 15%, with tax subsidy reduction and intensified competition impacting demand

Due to the expiration of the U.S. tax credit policy and increasing global competition, Tesla is facing significant sales contraction pressure in the fourth quarter, and it is expected to record a decline in annual deliveries for the second consecutive year.

Tesla rarely published a summary of analyst forecasts on its website on Monday, showing that analysts expect Tesla's fourth-quarter deliveries to be 422,850 vehicles, a year-on-year decrease of 15%. This internally compiled expected data is more pessimistic than the average value derived from a previous Bloomberg survey (445,061 vehicles, a decline of 10%).

This weak quarterly performance will drag down the annual performance data. According to a survey by Visible Alpha and data compiled by Tesla, the company's full-year deliveries for 2025 are expected to be between 1.6 million and 1.65 million vehicles, a year-on-year decrease of about 8%. This will mark the second consecutive year of annual sales decline for the automaker, with a more severe drop than the previous year.

Although Tesla launched lower-priced versions of its models at the beginning of the quarter in an attempt to offset the impact of subsidy reductions, market demand remains under pressure, and investors are closely watching the final production and delivery data to be released this Friday.

Impact of Expired Tax Credits on Demand

The decline in fourth-quarter deliveries is largely due to changes in U.S. federal tax incentive policies. The $7,500 federal tax credit expired at the end of September, leading buyers to rush to purchase vehicles in the third quarter to lock in the benefits, thus overdrawing demand for the fourth quarter.

To address this adverse factor, Tesla launched standard versions of the Model Y SUV and Model 3 compact sedan in October, both priced below $40,000, approximately $5,000 lower than the previous base models. Despite the introduction of cheaper models, analysts point out that the absence of tax credits and increasing global competition are still weakening demand.

Deutsche Bank analyst Edison Yu stated in a report that the decline in sales will primarily be driven by weak performance in the North American and European markets. Additionally, Tesla is not only facing competition from traditional automakers like Chevrolet and Ford, which are expected to launch affordable electric vehicles in the next two years, but also contending with the expanding market share of Chinese electric vehicle companies in Europe and Asia.

Market Expectations Become Cautious

Tesla's proactive move to publish the average analyst estimates on its investor relations page is uncommon. According to Tesla's compiled data, the market's view on its fourth-quarter performance is more conservative than external agency surveys. The Visible Alpha survey shows that analysts expect Tesla's fourth-quarter deliveries to be 432,810 vehicles, a year-on-year decrease of about 13%, slightly better than the 15% decline compiled internally by Tesla.

Looking back over the year, Tesla's sales encountered a slump at the beginning of the year. The sharp decline in early-year sales was partly attributed to the company's modifications to the assembly line for the redesigned Model Y. Additionally, CEO Elon Musk's earlier political comments, which sparked public backlash, also had some impact on sales in the first two quarters of this year Despite analysts at Visible Alpha expecting Tesla's sales to recover next year as the cheaper standard version helps the company defend its sales, the current market consensus still points to the company facing a decline in annual delivery volumes for two consecutive years.

Stock Performance and Long-term Goals

Although car sales have slowed, Tesla's stock price has not followed suit. As of Monday's close, Tesla's stock price has risen over 14% this year, although this performance still lags behind the S&P 500 index's 17% increase.

Investor enthusiasm is largely built on Musk shifting the strategic focus to Robotaxi (autonomous taxis), humanoid robots, and improved autonomous driving technology. Nevertheless, electric vehicle sales currently remain the primary source of the company's revenue.

After ending the controversy caused by his involvement in the Trump administration's cost-cutting department, he stated that he would refocus on his business. A recent court ruling cleared the way for Musk to regain a compensation plan that had previously been revoked by a Delaware court. Shareholders also approved a new compensation plan in November, which, valued at approximately $878 billion over the next 10 years, sets the cumulative delivery of 20 million vehicles as one of the key assessment targets