What happened

Shares of Tesla (TSLA 1.50%) tumbled on Thursday, declining more than 4% as of 12:40 p.m. ET. The stock is likely down because of knee-jerk selling in many growth stocks on Thursday, following the Federal Reserve's commentary yesterday about its expectations to raise interest rates next year.

The growth stock's decline extends a bearish trend for the electric car maker's shares recently. Share have fallen a total of 15% in December alone.

Tesla vehicles being produced in a Tesla factory.

Tesla factory. Image source: The Motley Fool.

So what

Many growth stocks were trading lower on Thursday. This is partly evidenced by the tech-heavy Nasdaq Composite's near-2% decline as of this writing. The index has more growth stocks in it than the S&P 500, which was down a lesser 0.5% as of this writing.

While Tesla stock has been battered and bruised in recent trading days, the stock is still up a market-beating 32% year to date. And that's on top of a nearly 700% gain in 2020. Shares, therefore, may simply be taking a breather after an epic run-up over the last two years.

Now what

Looking ahead, investors will be looking for Tesla to report strong vehicle deliveries for its fourth quarter. The company typically reports fourth-quarter deliveries within the first three calendar days of each year. So, investors can expect an update on Tesla's quarterly deliveries by Jan. 3, 2022. Analysts are largely expecting record deliveries for the period.

Tesla will need to continue growing its vehicle deliveries rapidly in order to justify its high valuation. As of this writing, the stock trades at about 300 times earnings. Though earnings have notably been growing very rapidly.