Tesla (NASDAQ:TSLA) is positioned to deliver a solid third quarter, but analysts caution that the momentum may not last as U.S. electric vehicle (EV) demand faces a sharp slowdown once tax incentives expire.
Barclays projects third-quarter deliveries of about 465,000 units, well above the consensus of 430,000, supported by a surge in U.S. sales ahead of the $7,500 EV tax credit expiration.
“We believe we are in the midst of a flow of positive datapoints for Tesla – and likely supporting the stock’s recent strength,” analyst Dan Levy wrote.
He added that a potential earnings beat could be fueled by this pre-buying effect and optimism surrounding Tesla’s robotaxi ambitions and its Nov. 6 annual meeting.
Still, Levy emphasized that the apparent strength is masking weaker fundamentals. The pre-buy effect is expected to weigh heavily on fourth-quarter volumes, with U.S. sales likely to decline significantly.
Barclays maintained its 2025 delivery forecast of about 1.6 million units, a 10% year-on-year decline, despite the third-quarter boost.
“While the 3Q beat will be appreciated, we believe investors may also look to the weaker expected volume outlook for 4Q and beyond,” Levy said.
Tesla’s regional performance remains mixed. China volumes are recovering sequentially but remain down year-on-year, while European deliveries continue to lag amid boycotts and brand damage tied to Elon Musk’s political involvement.
Meanwhile, U.S. volumes are set to jump by around 9% from last year on the pre-buy effect, though Tesla’s market share in the region has slipped to an eight-year low.
Rest of World (Row) sales held up strongly in the third quarter, with record deliveries in countries such as South Korea and Turkey. Much of the strength came from delayed arrivals of the refreshed Model Y, as exports from China reached those regions later in the quarter, Levy said.
Margins are likely to improve quarter-on-quarter, driven by higher volumes, a favorable product mix, and lower incentives. That may help offset headwinds from tariffs and raw material costs.
Barclays expects production of about 445,000 units in the third quarter, with inventories down by roughly 20,000 vehicles.
Levy said that the upcoming launch of a lower-cost model could help, but the ramp is delayed and its similarity to the Model Y may limit its impact in the near term.
Overall, Levy sees Tesla’s near-term momentum driven by temporary factors rather than sustainable demand. Investors, he suggested, are “riding the wave of favorable datapoints” for now, while a tougher backdrop for EV sales lies ahead.
Source :
https://www.investing.com/news/stock-market-news/teslas-nearterm-gains-mask-weaker-longterm-ev-demand-outlook-barclays-4238004
