Tesla's electric-vehicle sales declined for a second consecutive year. The market appeared to be OK with that.
Elon Musk's car company delivered 418,227 vehicles in the fourth quarter. Wall Street was looking for closer to 423,000, but investors were braced for a number around 415,000. The result was good enough to keep shares relatively stable on Friday.
Shares of the electric-vehicle maker were up more than 2% in premarket trading and traded as high as $458.34 early on Friday. But gains faded, leaving shares down 2.6%, closing at 438.07. The S&P 500 rose 0.2% and the Dow Jones Industrial Average added 0.7%.
Tesla's results demonstrate contraction. Tesla delivered about 497,000 cars in the third quarter of 2025 and 496,000 cars in the fourth quarter of 2024.
For the full year, Tesla sold 1,636,129 vehicles, down from 1,789,226 sold in 2024. Tesla's best full-year result was in 2023, when it sold 1,808,581 cars.
Two years of declines aren't ideal. Still, a fourth-quarter decline was expected because the federal government ended the $7,500 EV purchase tax credit in September, effectively raising the cost of EVs in America. Credit expiration also created a rush to buy EVs in the third quarter. Tesla's deliveries of 497,099 in the third quarter were a record for the company.
Predicting the stock reaction to a delivery decline is never easy. Investors seemed braced for a bad number. Tesla stock finished the year on a six-day losing streak, losing about 8% over that span, and finishing the year up 11%. Future Fund Active ETF co-founder Gary Black told Barron's that anything around 415,000 cars should be good enough to keep shares stable.
William Blair analyst Jed Dorsheimer called results "roughly in line with consensus" in a Friday report. He rates Tesla shares Hold and doesn't have a price target for shares. A Hold for Blair essentially means the broker expects Tesla stock to perform in line with the market.
Tesla also gave investors a small bit of good news on Jan. 1. It reported 52 million fourth-quarter charging sessions at its supercharger network, up 29% year over year. If nothing else, it's a sign people are driving their Teslas more. (Tesla lets other EVs use its chargers, too.)
Barclays analyst Dan Levy said Friday that there would be "limited focus on 4Q volumes," with investors caring more about AI and robo-taxis these days. He rates Tesla stock Hold and has a $350 price target for shares.
Tesla launched its robo-taxi business in Austin, Texas, in June with safety monitors in the front passenger seat. CEO Elon Musk has hinted that the safety monitors could be removed soon. That is a sign of progress that investors are waiting for.
To be sure, investors want Tesla's car business to be healthy and generate the cash needed to fund its future. But robo-taxis are what most excite the market. Tesla's 2025 gains valued the company at about $1.6 trillion and 220 times estimated 2026 earnings. Much of that value comes down to the company's work on AI applications, including robo-taxis.