Tesla’s car business back on growth path

REUTERS

Vehicle sales still its largest source of revenue

Anhata Rooprai and Akash Sriram

Tesla is on course to end two straight years of falling sales after its third-quarter deliveries beat Wall Street estimates on Oct. 2, with a rebound in Europe giving the automaker a way back to growth without U.S. tax incentives.

Shares for the company based in Austin, Texas, had lost about a fifth of their value this year, but rose more than 5% in early trading. The figures suggest Tesla’s core car business may be regaining momentum even as investors increasingly look past quarterly deliveries to CEO Elon Musk’s push into AI, robotaxis and humanoid robots.

The EV maker’s roughly $1.40 trillion valuation depends heavily on those long-term ambitions, even though vehicle sales are still its largest source of revenue.

“The strong numbers put Tesla on track for full-year deliveries growth following two years of declines. I point to FSD (Full Self-Driving) as being a differentiator that drives consumers to choose Tesla over other autos,” Morningstar senior equity analyst Seth Goldstein said.

Tesla needs 311,448 more deliveries to match last year’s total, fewer than it has delivered in any quarter since mid-2022.

In the United States, the Musk-led firm’s sales were expected to fall from a record third quarter last year, after a $7,500 federal tax credit for EV buyers expired at the end of September 2025.

Tesla delivered 486,532 vehicles in the July-September period, compared with analysts’ average estimate of 456,896 vehicles, according to data compiled by Visible Alpha.

After last year’s slump in Europe, caused partly by backlash against Musk’s politics and partly by cheaper Chinese rivals, EU registrations rose by about two-thirds in the January-August period from a year earlier, according to the European Automobile Manufacturers’ Association.

Tesla’s European sales recovery gathered pace in the third quarter, with strong registration growth in France and Denmark and broader gains in September, helped by government incentives, easier year-ago comparisons and rising consumer interest in EVs.