I was bracing for an ugly June delivery number, given Tesla’s share losses in China and Europe to BYD and the lingering effects of residential brand damage. My estimate of a 17% y/y decline generally reflected investor sentiment, even though the official consensus called for a 14% drop. In the end, Tesla reported a 14% decline in deliveries slightly worse than the 13% decline posted in the March quarter.

The good news is that growth rates should begin to improve from here. I’m currently modeling a 10% decline for September, versus Street expectations of a 6% drop. For December, both my forecast and the Street’s call for flat y/y growth.

My sense is these estimates may prove conservative, particularly due to the timing of the expiration of the U.S. EV tax credit. Roughly 38% of Tesla’s deliveries are in the U.S. If the tax credit expires, the average selling price of a Tesla in the U.S. would effectively rise by about 15%. That looming price hike could prompt fence-sitters to act, inflating U.S. demand in the back half of the year.

Based on current trends, I believe U.S. demand could increase by as much as 20% ahead of the credit expiration. The net effect of that surge would push total deliveries for the second half of the year up around 3%, compared to current consensus estimates calling for a 3% decline.

The downside is that any sales upside driven by a pull-forward effect from the tax credit expiration is likely to be heavily discounted by investors. That shifts the focus to March 2026, where I’m currently modeling a 3% y/y decline, versus Street expectations of a 10% increase.

A few years ago, the Tesla investment case centered on how quickly the company could scale to producing 10 million vehicles annually. Today, that narrative has shifted. I believe investors would be content with annual deliveries stabilizing around 2m units (with ~1.7m expected in 2025), provided Tesla continues to demonstrate meaningful progress on autonomy.

Why is 2m enough? That volume would be orders of magnitude greater than what competitors like Waymo are likely to put on the road. Even at full run rate, I estimate Waymo’s deployment will max out around 200k vehicles annually. In other words, Tesla’s scale gives it a unique advantage, but only if autonomy execution follows through.

It’s all about autonomy now.

For 2025, I believe the key autonomy milestones investors should focus on include:

1. Expanding the Austin geofence.

2. Scaling to a few hundred Robotaxis by the end of Q3 – No need to hit Musk’s 1k vehicle target; what’s important is visible progress from the estimated 15 vehicles currently operating.

3. Launching in a new city – Likely candidates include San Antonio, Los Angeles, or San Francisco

These milestones are realistic and, if achieved, could serve as meaningful catalysts for TSLA shares.

Disclaimer