Tesla delivered 480k vehicles in the June quarter, up 25% y/y. Adjusting for the fact that Model S and Model X were effectively sunset and contributed very few units, growth would have been closer to 27% on an apples-to-apples basis. That is the strongest growth rate since September 2023, at 27%. The three factors impacting the stock on the update:

Buy on the rumor, sell on the news. Going into the update, the official Street number was 406k, implying 6% growth, which was similar to the March quarter. The high end of estimates came out earlier in the week and was around 460k, up 20%. The best evidence of the rising whisper number was that Tesla shares were up 13% over the prior five trading days, compared to the Nasdaq up 4%. In other words, the reported number was more or less in line with the high end of the whisper number.

High gas prices were a one-time tailwind. In the U.S., the average price of a gallon of gas in the June quarter was $4.21 compared to $3.16 a year ago, up 33% y/y. That reality pushed gas car buyers over to Tesla. While it’s difficult to measure the magnitude of the tailwind, I believe it was relatively small, given that most U.S. consumers believed that the spike in gas prices was tied to the U.S.-Iran war and was expected to end soon. My guess is it added 5% growth in the quarter.

The fading of the DOGE headwind. A year ago, brand damage related to Elon’s work on DOGE, which also spilled over into Europe, was at a peak. That headwind slowed in May 2025 when Elon stepped away from his DOGE role, and the investor belief is that the benefit of the fading headwind is largely one-time in nature.

Deliveries in June of this year were up 25% y/y, and up 27% adjusting for S/X end-of-life, marking the strongest growth since September of 2023, when they were also up 27%. Starting in March of 2024, growth hit the wall, with deliveries ending CY24 down 1% and down 9% in CY25. In March of this year, growth hit 6% y/y, which was meaningful given it was the first full-quarter test of demand after the ending of the U.S. tax credit back in September 2025. While that 6% was a favorable move forward, it was a single data point. Now we have two quarters in a row of favorable delivery data, suggesting, in my book, that the EV winter is ending.

Looking forward to September, the Street is looking for deliveries down 8% y/y given the strength in September 2025, when deliveries were up 7%.

For CY27, the Street is looking for 10% delivery growth. Based on the just-reported quarter and my belief that consumers are getting increasingly optimistic about going electric, I expect next year’s growth to land between 10% and 15%.

Investors have spent the past year shifting their focus from deliveries to autonomy, Robotaxi, and Optimus. I agree that’s the right focus, but deliveries still matter. More vehicles on the road mean more data, more FSD usage, more potential FSD customers, more Robotaxi supply, and overall more shots on goal in physical AI.

As long as deliveries are growing at 5% or better for the full year (there is lumpiness quarter-to-quarter), I believe long-term investors will be satisfied and can focus on the broader autonomy opportunities. Conversely, if they decline 5% every year, that slow burn will erode investors’ long-term confidence.

Disclaimer