Tesla ended 2025 with a paradox that defines the current market moment: shares hit all-time highs while vehicle deliveries likely declined for the second consecutive year. The stock added over $915 billion in market cap in eight months—yet Q4 deliveries are expected down 11% year-over-year.
Wall Street’s 2026 delivery estimate has collapsed from over 3 million vehicles two years ago to roughly 1.8 million today. The bull case for 2026 is now flat to up 5%—a dramatic recalibration from the growth narrative that drove Tesla’s initial ascent.
Meanwhile, BYD has overtaken Tesla in EVs. The Chinese automaker likely outsold Tesla in battery-electric vehicles for a fifth consecutive quarter, hitting 4.6 million total vehicle sales in 2025. BYD’s momentum in Europe—where Tesla cannot obtain FSD regulatory approval—continues surging.
Two Companies in One Stock
Tesla has become two companies in one stock. The car business is stagnating—a business model facing competitive headwinds from Chinese manufacturers with cost advantages and regulatory access Tesla lacks.
The autonomous/robotics business is pure optionality, priced at over $1 trillion in market cap. Musk’s proposed compensation package could pay $1 trillion based on robotaxi milestones alone.
The Robotaxi Bet
The robotaxi thesis is now the entire investment case. The Austin robotaxi service launched in June but violated traffic laws on day one, drawing federal regulator attention. The gap between vision and execution remains wide.
Investors have fully bought into Musk’s autonomous vision. The question is whether reality catches up before the vision materializes—or whether the second-order effects of regulatory friction and competitive pressure compress the optionality window.
Tesla’s paradox captures the broader market moment: fundamentals and narratives have decoupled, and narrative is winning.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
