Street delivery expectations for December and full-year 2026 are likely too high. The Street currently models 17% growth next year; I expect deliveries to end up roughly flat.

Changes to Delivery Estimates

This is the negative though few Tesla investors seem to care. Street delivery estimates for next year, up 17%, are based on the belief that the lower-priced vehicle will drive incremental growth. My sense is that the lower-priced Model Y is effectively the affordable vehicle, and it won’t generate enough new demand to push growth into the mid-teens.

I expect next year’s deliveries to be up slightly, around 5%, given that deliveries slipped 13% in the first half of 2025.

Despite Street numbers likely coming down, I don’t expect a negative reaction in TSLA shares. The big picture remains intact: other automakers are retreating from electrification, putting them in a catch-22 once autonomy gains traction, you need EVs to monetize autonomy. That’s a long-term advantage for Tesla.

The central investment case for Tesla is that the company is uniquely positioned to capitalize on “physical AI” through robotaxi, FSD, and Optimus. Investors remain hyper-focused on updates across these three fronts.

Robotaxi

There are no official numbers for vehicles on the road, but I estimate 50–75 vehicles currently operating in Austin and the Bay Area, up from around 35 three months ago. It’s unlikely Tesla provides specific figures, but expect language suggesting the fleet will expand meaningfully next year.

Since the last earnings call, the company has outlined potential expansions: Phoenix and Las Vegas are in testing (10–15 vehicles each), with public rides potentially starting Nov–Dec 2025. Tesla aims for 20–23 U.S. metros (e.g., LA, Miami) by year-end 2026, pending approvals.

What’s most important is whether Elon reiterates his prior statement that the fleet will go from “tiny to gigantic, in terms of operations, in a pretty short period of time… with a material impact on our financials around the end of next year.”

FSD

Updates have been limited. Elon said last quarter that FSD will be available for personal use by year-end in certain geographies. This remains the biggest risk factor heading into the call, given we’re only 10 weeks from year-end and Elon has described this as a topic he’s “paranoid” about.

Non-Tesla Vehicles Joining the Robotaxi Network

Elon previously said non-Tesla vehicles could join the robotaxi network sometime next year, again describing the timing as something he’s “paranoid” about. Expect similar language this quarter, as year-end 2026 is still a long way off.

Optimus

Investors love hearing about Optimus, though few are pricing in its potential. If the market fully believed in its impact, Tesla’s valuation could rival Nvidia’s. Today, it’s roughly a third of that.

Elon said last quarter:

“We’ll have a bunch of Optimus robots on stage at the shareholder meeting. I’d be surprised if five years from now, 60 months, we’re not making roughly 100,000 Optimus robots a month.”

Bottom line: it’s still too early for Optimus to materially move sentiment on this earnings call.

A housekeeping item: earnings will face headwinds over the next couple of years due to changes in how Tesla can sell regulatory credits to other automakers.

In peak quarters, these sales accounted for up to 45% of net income, a boost investors have historically backed out as non-core.

In June, Tesla reduced its remaining regulatory-credit related RPO from just over $4.58B to around $3.47B, reflecting a weaker regulatory environment. For 2026, the Street is looking for regulator credit revenue of $1.6B, down from $2B in 2025. In 2027, the Street is looking for $1.1B. The issue is with 2027 and beyond as the U.S. relaxes fuel economy improvement requirements for traditional automakers, which will diminish demand for Tesla’s credits.

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