Tesla shares (TSLA) edged higher on Wednesday even as new data showed another steep drop in electric vehicle sales across key markets. Investors, for now, seem willing to look past the slowdown, betting that the company’s long-term growth will come from its expanding artificial intelligence projects rather than its car volumes.
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Industry checks from Wells Fargo’s (WFC) Colin Langan showed October sales falling 23% year over year across North America, Europe, China, and South Korea. North American volumes were an estimated 45,000 vehicles, down 25% from September after buyers rushed to capture the expiring $7,500 federal purchase credit.
“We expected to see the payback on U.S. October deliveries after the Inflation Reduction Act credits ran out; however, foreign markets continue to show weakness,” Langan wrote, adding that this leaves “downside” to fourth-quarter delivery estimates. Wall Street now models about 440,000 deliveries for the quarter, below almost 500,000 in the third quarter and roughly 496,000 in the year-ago fourth quarter.
TSLA Stock Shrugs and Climbs
Despite the drop in units, TSLA shares were up about 0.7% premarket to $442.68. Through Wednesday’s open, the stock was up roughly 9% year-to-date and 26% over 12 months, even after drifting lower by about six dollars since the Nov. 6 shareholder meeting.
The market’s reaction suggests investors had already braced for weak fourth-quarter auto numbers. The bigger swing factor for the stock is not the next delivery print. It is the pace of progress on software and autonomy.
Investors Chase AI Bets
Fund managers continue to frame Tesla as an AI platform tied to self-driving subscriptions, robo-taxis, and humanoid robots. This lens helped the shares hit a record in December 2024 even as global EV sales trends cooled.
This same lens helps explain today’s resilience. If high-margin software and services scale, the earnings mix changes quickly, and the stock price will follow that path more than quarterly unit counts.
Musk’s Targets Anchor the Narrative
The company’s new pay package keeps the spotlight on AI. To unlock roughly 425 million shares, Elon Musk must sell cars and also reach three ambitious milestones: 10 million driver-assistance subscriptions, one million deployed robo-taxis, and one million robots.
Those targets tell investors what management plans to prioritize in the coming years. For the market, the question is not whether fourth-quarter deliveries miss by a few tens of thousands. It is whether Tesla can turn autonomy and robotics into recurring revenue at scale.
What Bears Flag Next
Skeptics point to the current sales weakness and to China specifically, where Tesla is on pace for its first annual decline. Langan rates the shares Sell with a $120 target, arguing the auto slowdown still matters.
Bulls counter that any delivery miss is a speed bump if software revenue begins to compound. Until the company updates its AI roadmap, expect the stock to trade more on autonomy headlines than monthly registration tallies.
Is Tesla Stock a Buy, Hold, or Sell?
Analysts remain divided on Tesla’s long-term outlook. Of the 34 Wall Street analysts who have issued ratings in the past three months, 14 rate the stock a Buy, 10 suggest a Hold, and 10 recommend a Sell.
The average 12-month TSLA price target sits at $382.54, which implies a 14% downside from Tesla’s latest trading price.
