By Stefon Walters – Jan 23, 2026 at 8:10AM EST
Summarize with AI
Key Points
Tesla's electric vehicle (EV) deliveries in 2025 declined by 8.5% year over year.
Chinese automaker BYD has overtaken Tesla as the world's top EV seller.
Tesla's long-term investment appeal rests on its ability to bring robotaxis to the mainstream.
CEO says this is worth 18 Nvidias. Will this make the world's first trillionaire? ›
The company's ambitious plans are still far away from being tangible.
Long-time Tesla (
TSLA
0.04%
) investors can attest to just how much of a roller-coaster ride it's been for shareholders. After losing over 40% of its value from January 2025 to April 2025, the stock finished the year strong, up around 11.4%.
Although Tesla underperformed the S&P 500, it was a much better performance than many anticipated mid-year. It didn't come without disappointing news at the end of the year, though.
Image source: Tesla.
A core business headed in the wrong direction
Unfortunately, 2025 was a record-breaking year for Tesla for all the wrong reasons. The company only delivered around 1.63 million vehicles in the year, 8.5% fewer than in 2024. This was the biggest year-over-year drop in its history.
In the fourth quarter, deliveries fell 16% year over year, and for the first time ever, it's no longer the world's top electric vehicle (EV) seller. That distinction now goes to Chinese automaker BYD, which sold around 2.26 million battery EVs in 2025.
Part of the reason for the decline is the emergence of lower-cost options around the world (such as BYD and Geely), as well as the expiration of government tax credits that had lowered Tesla prices for many consumers. The $7,500 U.S. federal EV tax credit expired at the end of September 2025.
Advertisement
Expand
NASDAQ: $Tesla Motors(TSLA)$
Tesla
Today's Change (-0.04%) $-0.18
Current Price $449.18
Tesla's future rides on robotaxis becoming a thing
Auto sales account for close to three-fourths of Tesla's revenue, but its long-term investment case hinges on the company's ability to deliver on its robotaxi ambitions. In an ideal world, robotaxis would give Tesla a high-margin business that operates more like a software company than an automaker.
Where to invest $1,000 right now
When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 937%* — a market-crushing outperformance compared to 195% for the S&P 500.
They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.
See the stocks ›
*Stock Advisor returns as of January 24, 2026.
Unfortunately, the stock is priced as an artificial intelligence (AI) company and as if robotaxi commercialization is guaranteed, though that's far from the case. Which brings us to the next point.
Tesla's stock is trading beyond a premium
Even with the question mark surrounding Tesla's current core business, the stock is extremely expensive, currently trading at 201 times its projected earnings over the next 12 months. For perspective, that's more than five times higher than Nvidia, more than 6.5 times higher than Amazon, and nearly 10 times higher than Meta.
TSLA PE Ratio (Forward) data by YCharts.
Trading that expensively means investors are pricing a lot of growth into Tesla's stock, but its current business performance far from justifies it. Even with meaningful robotaxi progress, it would be extremely hard to justify Tesla's current valuation.
If you're thinking of investing in Tesla, be prepared to wait years (like 10 or more) for its autonomous vehicle plans to become tangible and for the inevitable high volatility along the way.
CEO says this is worth 18 Nvidias. Will this make the world's first trillionaire?
Nvidia’s CEO just revealed that one breakthrough could create more millionaires in the next five years than the internet did in two decades.
Amazon’s Jeff Bezos says it is “hard to overstate the impact.” And Cathie Wood projects AI could be an $80 trillion opportunity by 2030. That is the equivalent of 18 Nvidias, 21 Microsofts, or 33 Amazons.
But here’s what most investors miss: almost all that growth runs through a single choke point. One little-known company, called an “Indispensable Monopoly,” provides the critical technology Nvidia, AMD, and Intel cannot function without. And it is still just a fraction of Nvidia’s size. We just released a brand-new report with the full story and the company’s name.
Continue ›
Read Next
Jan 23, 2026 •Daniel Sparks
Does This Good News From Tesla Make the Growth Stock a Buy?
Jan 20, 2026 •Daniel Sparks
Is Tesla a Good AI Growth Stock to Buy and Hold For the Next 10 Years?
Jan 20, 2026 •Patrick Sanders
Could Buying Tesla Stock Today Set You Up for Life?
Jan 17, 2026 •Neil Patel
What Tesla Needs to Prove in 2026
Jan 15, 2026 •Rick Munarriz
Where Will Tesla Stock Be in 1 Year?
Jan 14, 2026 •James Hires
2 EV Stocks That Could Be Heading for $0, and 1 With Multibagger Potential Left
About the Author
Stefon Walters is a contributing Motley Fool stock market analyst covering publicly traded companies across technology, consumer goods, and financials, as well as retirement planning. Stefon is a published author and has more than a decade of experience teaching financial literacy. He holds a bachelor’s degree in economics from the University of North Carolina at Chapel Hill.
TMFStefonW
Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.
Motley Fool issues A.I. buy alert
This tech could reach $80 trillion. Imagine a technology worth over 18 Nvidias.
What in the world could be worth 18 Nvidias? The answer is a radical tech breakthrough that our experts think is transforming every walk of life. And this giant leap forward has many on Wall Street very excited.
Continue ›
Stocks Mentioned
Tesla
NASDAQ: TSLA
$449.18 (0.00%) $0.18
Motley Fool Stock Advisor's Latest Pick
Get Access
937% Avg Return*
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Advertisement
Advertisement
Premium Investing Services
Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.
View Premium Services
Making the world smarter, happier, and richer.
YouTube
TikTok
© 1995 - 2026 The Motley Fool. All rights reserved.
Market data powered by Xignite and Polygon.io.
About The Motley Fool
About Us
Careers
Research
Newsroom
Contact
Advertise
Our Services
All Services
Stock Advisor
Epic
Epic Plus
Fool Portfolios
Fool One
Motley Fool Money
Around the Globe
Fool UK
Fool Australia
Fool Canada
Free Tools
CAPS Stock Ratings
Discussion Boards
Calculators
Financial Dictionary
Affiliates & Friends
Motley Fool Asset Management
Motley Fool Wealth Management
Motley Fool Ventures
Fool Community Foundation
Become an Affiliate Partner
Terms of Use
Comments