The fourth quarter was widely expected to be challenging following the expiration of the U.S. federal EV tax credit at the end of Q3, which likely pulled forward a meaningful portion of demand into the third quarter—when Tesla delivered a record ~497k vehicles. However, the sequential decline of more than 75,000 deliveries is sharper than many bullish investors had anticipated. This magnitude of decline raises concerns around underlying demand elasticity, regional softness (particularly in North America), and the effectiveness of recent pricing actions. It also puts pressure on operating leverage and margins, especially given elevated inventory levels and ongoing capex commitments. While some normalization was expected post-incentive, the scale of the drop suggests near-term delivery volatility may persist.