Tesla Quarterly Deliveries Jump 25%. Here’s Why the Stock Fell Anyway.
Key Points
The rebound in electric vehicles is a welcome sign for investors.
However, the market already seemed to have priced in this rebound prior to the announcement.
It's also possible that the EV rebound is less about the core business and more about external factors impacting the sector.
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After several quarters of a struggling electric vehicle (EV) business, Tesla (NASDAQ:TSLA) finally delivered results that one would have expected the market to like.
The company reported over 480,000 EV deliveries in the second quarter of the year, up 25% year over year. The number also beat Wall Street consensus estimates of 406,000.
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Despite the beat, Tesla stock closed the day down 7.5%.
This is not Tesla’s formal second-quarter earnings report, which will take place on July 22. Within a few days of the end of each quarter, Tesla provides investors with an update on production and deliveries.
Here’s why Tesla stock fell even after the strong results.
Image source: Tesla.
Other Factors are at play
Tesla’s stock had been on a strong run in the days leading up to the deliveries report, so it’s quite possible the market saw this coming in advance.
“… investors anticipated the beat,” Gary Black of The Future Fund wrote on X.
Tesla’s EV business has really struggled since the Trump administration took office. Trump’s One Big Beautiful Bill eliminated a $7,500 EV tax credit that incentivized the purchase of EVs.
However, it’s likely that part of the blowout delivery numbers had to do with the Iran war, which has driven the average price per gallon of gas to $3.83 (as of July 2), according to AAA.
This could have prompted people to take a second look at their transportation and decide that owning an EV is worth the upfront cost.
Tesla isn’t the only EV company that has seen a lift lately.
Rivian also reported deliveries today and raised its full-year EV guidance from 62,000 to 67,000 units to 65,000 to 70,000 units.
Another aspect of Tesla’s business that investors and analysts are watching is its energy storage products, including Megapacks, which store energy to provide grid stability, and Powerwall, compact home batteries that can store solar energy or grid-supplied energy.
In the second quarter, Tesla’s energy products deployed 13.5 gigawatt hours (GWh) of energy storage products. That’s actually up significantly from the first quarter production of 8.8 GWh.
But some analysts still found this lacking, possibly because Tesla deployed 14.2 GWh in the fourth quarter of 2025.
“The pace of growth for Tesla’s energy storage business has tempered,” William Blair analyst Jed Dorsheimer stated in a research note Thursday, according to Barrons. “But our view of the demand environment has not changed; [Tesla] Megapacks continue to be critical to the AI data center and power buildout.”
The EV business no longer drives the stock
While the EV business still makes up the bulk of Tesla’s revenue, it is no longer a major driver of the stock, as many Tesla followers know.
A rebound in the EV business won’t hurt Tesla, but it’s also not going to help it, given the current valuation of close to 190 times forward earnings.
The future of Tesla’s stock depends on robotaxis and humanoid robots, both of which are still in their early stages and do not yet materially affect the company’s financials.
My long-held belief is that the easy money has already been made in Tesla. Material appreciation from here depends on strong execution in robotaxis and humanoid robots, which I think will be easier said than done.
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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
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