TradingKey - Although Tesla (TSLA) sales data have been underwhelming, we still believe Tesla stock warrants attention. We advise investors to focus on its upcoming Q4 2025 earnings report scheduled for release in January.
If the upcoming earnings report fails to show improvement in Tesla's other business segments, the short-term risks for investors may remain significant.
I. Do the core advantages of Tesla's EV business still exist?
Vehicle Engineering Capabilities
Tesla's core advantages remain intact; its vehicle architecture and FSD provide a competitive edge. Tesla has consistently earned high scores in various international crash tests; its battery pack structure, body rigidity, and giga-casting architecture maintain a leading position in passive safety and overall vehicle engineering.
FSD
Tesla's FSD (Full Self-Driving) is an advanced driver-assistance system. It allows vehicles to automatically change lanes, recognize traffic lights, navigate turns, and follow traffic on both highways and urban roads; however, it currently requires constant driver supervision and readiness to intervene, and is not yet true 'fully autonomous driving.'
Despite persistent skepticism regarding its commercialization path, FSD remains one of the world's most visionary intelligent assets. Given its scale of real-world user data, speed of algorithmic iteration, and end-to-end model approach, Tesla remains one of the companies closest to achieving 'scalable autonomous driving' globally.
Supercharger Network
Unlike most automakers that rely primarily on third-party charging operators, Tesla is one of the few EV manufacturers to build and operate its own global charging network. To date, its Supercharger network covers major markets in North America, Europe, China, and the Asia-Pacific, creating a large-scale, systematic infrastructure layout.
We still believe Tesla's EVs possess strong core advantages. The cultivation of these strengths keeps its fundamentals robust, which is also the reason many investors are willing to pay a high premium, recognizing its competitive moat.
II. Why is the market starting to worry about Tesla's EV business?
According to new data shared by Teslarati, following wholesale sales of 86,700 units in China in November, Tesla's December wholesale sales reached 97,171 units, second only to the 100,291 units recorded in November 2022.
While Tesla's fourth-quarter deliveries remained strong, total annual wholesale sales were 851,732 units, down 7.1% year-over-year. These sales figures suggest that Tesla's electric vehicle business may be facing difficulties.
The slowdown or even stagnation of growth in Greater China is a primary factor for market concern regarding Tesla's EV business. Furthermore, Elon Musk's heavy involvement in politics in 2025 has triggered consumer boycotts against Tesla, indirectly impacting EV sales.
Additionally, intensifying industry competition has squeezed Tesla's market share. Hyper-competition among Chinese automakers has forced Tesla to lower vehicle prices, putting sustained pressure on margins. As shown in the chart, Tesla's EV profit margin has dropped from a peak of 27.1% to 17% in the third quarter.
III. What do the latest sales data indicate?
Although recent sales data from Greater China show some stabilization, Tesla's Q4 2025 operational data reveal that the company has completely lost its throne as the 'world's top-selling EV brand.'
According to data from Tesla's official website, the company delivered 418,227 vehicles and produced 434,358 in the last three months of last year; for the full year, deliveries totaled 1,636,129 units with production at 1,654,667 units. The final figures were not only lower than most analysts' expectations but also below the 'company-compiled consensus' released earlier this week.
The decline in Tesla's annual sales actually aligns with market expectations. There is limited room for market share growth in North America, while growth in the European market plummeted following Musk's entry into politics. Although China has surpassed North America as Tesla's largest single market, the EV sales figures there have also caused Tesla's performance to pale in comparison.
Is now the right time to watch Tesla stock?
Our answer is yes. Despite sluggish EV sales, Tesla's focus on Robotaxi, FSD, and AI robotics continues to gain momentum. In the future, Tesla's stock price may be driven by factors other than EV sales volume, providing the company with significant visionary potential—this is also why Tesla commands such a high P/E premium.
Ultimately, however, we must rely on financial report data as the benchmark. If the upcoming earnings report fails to show progress in Tesla's other business areas, short-term risks for investors may remain elevated.
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