The big picture is that the March quarter (excluding S/X) will be the first true read on demand following the ending of the U.S. tax credit back in September 2025. In that quarter, deliveries were up 7% y/y after being down 13% in both the March and June quarters of 2025. That upside was impacted by sales getting pulled from December into September, which resulted in December deliveries being down 16% y/y.

The March 2026 quarter should be the first read on underlying demand. Recall that about 40% of sales come from the U.S. (Deepwater est.), and of those, about three-quarters took advantage of the tax credit. That means about 30% of total sales previously were propped up by the EV tax credit, which effectively lowered the cost by about 10%. Other buyers did not qualify for the credit because they made too much money.

Getting to the numbers, the Street is expecting overall deliveries of 366k in March, up 8.5% y/y. It’s worth noting, those numbers have come down given three months ago the Street was expecting 13% growth in March. Backing out Models S/X, which will see a bump this quarter given those units will no longer be available after March 31st (orders stopped mid-February), the Street is expecting 8% growth for Model Y/3 at 351k. I believe anything that shows flat or better growth will be a win, which means the true bogey is Model Y/3 units of 324k or better.

Energy and storage are slowly becoming a greater focus for investors. In March, deployments are expected to be up 38% y/y and account for 16% of sales. This compares to a year ago when the segment accounted for about 13% of sales.

While shifting political landscapes and fluctuating federal subsidies create headwinds, there is a massive boom in battery storage (like Tesla’s Megapack and Powerwall business). The reason is that utilities are turning to large-scale battery installations because they can be deployed much faster than building traditional power plants or waiting years for transmission line upgrades.

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