Despite returning to double-digit year-over-year revenue growth in Q3, fueled by a return to growth in vehicle deliveries, it's unlikely that Tesla (TSLA 2.56%) kept up this momentum in Q4, despite recently introducing a lower-cost version of its Model Y. This is because Q3 benefited from a pull-forward in demand as buyers rushed to get electric vehicles before the federal electric-vehicle credit expired. In addition, deliveries far exceeded production in Q3 -- a factor that will likely weigh on fourth-quarter deliveries.
We'll soon find out exactly how many vehicles Tesla delivered, as the company typically reports its quarterly deliveries within the first few days following the last day of its quarters. This means the electric-car maker will likely report its fourth-quarter deliveries on January 2nd or 3rd.
Ahead of the delivery release, here's a closer look at why fourth-quarter deliveries likely won't be impressive -- and why the story is bigger than Q4 anyway.
Cybercab interior. Image source: Tesla.
Why Q4 could be weak
The federal clean-vehicle credit created a hard deadline for electric vehicle shoppers of Sept. 30, 2025. The credit was no longer available for qualifying vehicles purchased after this date, giving buyers a reason to pull future purchases into the third quarter.
Tesla's own data on vehicle deliveries show just how significant the acceleration in demand was in Q3. Total third-quarter deliveries rose 7% year over year. That was after they fell 13% year over year in Q2.
In addition to a pull-forward in demand in Q3, the company benefited from delivering more vehicles than it produced in the period. Specifically, total third-quarter deliveries were 497,088, and total vehicles produced came in at just 447,450.
This inventory drawdown, combined with the loss of a major catalyst for orders, will make achieving big delivery figures difficult for Tesla in Q4.
There's more to the story than Q4
Of course, investors shouldn't get too hung up on what Tesla reports for fourth-quarter deliveries. Clearly, there are some major headwinds working against the company during the period. What matters is the long-term trajectory -- and Tesla executives have had plenty to say about that.
Tesla's chief financial officer Vaibhav Taneja explained in Tesla's third-quarter earnings call that he believes the company has an important catalyst on the horizon that may help. But it may take some time to start showing up in the numbers.
"We feel that as people experience the supervised [full self-driving] at scale, demand for our vehicles, ... [will] increase significantly," said Taneja.
Even more, Tesla CEO Elon Musk said in the third-quarter call that when the company achieves unsupervised full self-driving, demand will accelerate further. Further, he stated that he's confident enough in the path to autonomy that the company is already planning to ramp up production as quickly as possible.
NASDAQ: TSLA
Key Data Points
All of this to say, Tesla's fourth-quarter delivery figures might come in at an unimpressive level, but investors will likely need to zoom out beyond the quarter's reported deliveries to get the full story.
Tesla's fourth-quarter earnings release, which typically occurs later in January, will likely be insightful because management will likely provide a timely update on vehicle demand trends. In addition, the company may provide full-year guidance, giving investors even more context.
Whatever the case, the bar his high. The growth stock currently trades at a price-to-earnings ratio of 310. Clearly, investors have no problem looking past a potentially weak Q4. A valuation like this puts immense pressure on Tesla to deliver on its autonomous driving aspirations.
Even if Tesla achieves unsupervised full self-driving capability in its vehicles, there's a big question mark regarding the timing. When will full self-driving be achieved? When will it be achieved at scale? And how fast will it impact demand, and to what degree?
Hopefully, Tesla investors will get answers to some of these questions throughout 2026.
