Tesla

Tesla’s March quarter delivery report slightly missed the estimates, up 6.3% y/y vs. the Street at up 8% and the whisper of up 10%. The more important takeaway is that deliveries still grew 6% y/y in the first quarter, which offers a cleaner read on demand without the benefit of the U.S. tax credit that ended last September and added noise in the December report. March deliveries reinforce the view that Tesla's auto business is stabilizing, which remains strategically important to the broader autonomy story. Separately, the big miss in Energy and Storage (about 13% of the business), was a timing issue.

The bottom line: If Model 3 & Y deliveries come in at 324k or better (vs. the Street at 351k), it is a win for TSLA shares. It would demonstrate stability (flat y/y) in the first clear read on underlying demand following the expiration of U.S. EV credits. Taking a step back, while investor focus has shifted — with Robotaxi, FSD, and Optimus progress now central to the investment thesis — deliveries still matter. For the headline number, the Street is expecting 366k (up 8.5% y/y), compared to a 16% decrease in Dec-25 and a 7% increase in Sep-25. I am expecting 345k (up 2%). The key metric will be Model 3/Y deliveries, as S/X are being phased out. The Street is expecting 351k (up 8%), while I am expecting 330k (up 2%).

Tesla’s quarter was met with shares up 2% in after hours, follwing shares being down 0.5% over the past week, suggesting investors were modestly impressed by the company’s progress in autonomy. I believe the stock action understates the progress the company is making in physical AI, and expect a breakthrough in FSD in the next one to two years, which should have a domino effect of accelerating progress in Robotaxi. My evidence of this progress includes recent personal observations of FSD, the company now reporting FSD subscriptions, and the company discontinuing Model S and X, about 2% of sales, in favor of using production lines to ramp Cybercab.

Tesla will report December earnings on Wednesday, January 28th. Since reporting deliveries on January 2nd, shares of TSLA are up 1%, in line with the Nasdaq. The three most important topics on the call are the timing of expanding safety-driver-free Robotaxi service to new cities, high-level commentary on deliveries in 2026, the first full year without the tax credit, and margin expectations this year, including the impact of the lower-priced Model 3 and Model Y. While FSD, Optimus, and timing of Cybercab ramp are top of mind, there is likely little new Elon will say to change how investors are gauging the success of those segments. In the end, I expect shares to move higher throughout the year as investors gain confidence that Tesla remains best positioned to capitalize on physical AI.

Tesla delivered 418k vehicles versus Street expectations of 420k and above the whisper number of 415k. Overall, deliveries were down 16% year over year in December, compared with up 7% in September. Cutting through the noise around the timing of the tax credit expiration, I believe deliveries would have been down ~5% in both September and December signaling stabilization that should allow investors to remain focused on autonomy. Additionally, I believe these results indicate the first U.S. EV market share gains in a couple of years.

We expect December deliveries, which will likely be reported on Friday, January 2, to come in at 415k versus the Street at 449k. This would imply deliveries are down 16% y/y, compared with the Street’s expectation of a 10% decline. The difference reflects our model’s adjustment for the expiration of the tax credit in September, which assumes year-over-year growth in September and December will be consistent at down 5%. Ultimately, investors are likely to look past any December-quarter delivery miss, as the results should suggest the auto business is beginning to stabilize.

A lot happened in 2025 when it comes to robotaxis, which makes it fitting to mark where things stand today between Waymo and Tesla. This year, Waymo moved beyond the pilot phase and entered the scaling phase, with a fully driverless service operating in five US cities and a fleet of around 2.5k vehicles. Tesla’s Robotaxi is running a fleet of around 50 vehicles, largely supervised in Austin and the Bay Area. While Waymo has the lead, the market remains nascent, likely exiting 2026 with about 1% of rides in the US, which means Tesla has plenty of time to catch up. For 2026, it will all come down to how the no safety driver Austin test goes. If that goes well, look out Waymo.

The shareholder meeting was a good day for Elon. Investors overwhelmingly approved his $1T pay package with more than 75% in favor. That's a win for TSLA investors for two reasons. First, it gives Elon the control and financial carrot he wanted, which means he will stay engaged at Tesla. Second, the high level of support likely means investors will continue to look past near-term challenges and stay the course with hope for the long term. Elon made it clear that the long term is anchored in the success of Optimus. Separately, during Musk's presentation and Q&A, he floated the idea of building a fab, an outcome I put in the unlikely category over the next five years.

On Thursday after the markets close we'll find out if Musk's pay package is approved by shareholders. While the $1 trillion in potential payouts grabs headlines, what's at stake goes beyond compensation, it's about control of the company. I believe the package will pass. If I’m wrong and it’s voted down, my sense is that this has become personal. While he likely wouldn’t outright quit Tesla, he would meaningfully reduce his time at the company. In the end, a “No” vote would be a loss for Tesla investors.

The September numbers and earnings call were largely uneventful with a slight negative around some recalibration investors will be making on the timing of unsupervised Robotaxi and FSD. The big picture remains intact: Tesla is the best-positioned company for AI…

Shares of TSLA are up 35% since June earnings, compared to the Nasdaq’s 9% gain. While the bar may appear high heading into Wednesday’s report, I see most paths pointing to shares continuing higher. Investors have fully bought into the company’s long-term vision, and that vision will be reiterated on the call.

Tesla surprised investors by announcing that the rumored cheaper, slimmed down Model Y is essentially the same as the standard version, just with fewer color, wheel and seat options, priced at $40K, down 11% from $45K. This move signals that Tesla is becoming more aggressive in selling the Model Y in a post–tax credit world, which should help deliveries grow 16% next year (per Street estimates) compared to a 9% decline this year. I believe a truly affordable $30K model is still in the works for 2027, which will be key to winning autonomy.