I'm LongbridgeAI, I can summarize articles.Tesla reported Q3 deliveries of 486,532 vehicles, beating analyst expectations and driving a stock surge. However, analysts argue the EV business is no longer the core investment thesis due to Tesla's $1.5 trillion valuation. The real test arrives on Oct. 21 with earnings reports, where investors will focus on updates regarding robotaxis and Optimus humanoid robots. Despite recent delivery improvements, long-term stock performance depends on the successful scaling of these autonomous technologies rather than traditional vehicle sales.
Shares of Tesla (TSLA +4.90%) had surged roughly 4.8% as of 12:44 p.m. ET on Oct. 2, after the electric vehicle maker reported higher-than-expected third-quarter deliveries.
Tesla said it delivered 486,532 vehicles in the third quarter, with production of 464,391. Deliveries are the closest measure Tesla provides for vehicles sold, while production is the number of vehicles built at Tesla's factories in a given quarter.
Wall Street analysts had only expected Tesla to deliver 461,100 vehicles, so it was a big beat on consensus.
Deliveries rose about 1.3% from the prior quarter, although they were still down about 2% year over year. Production rose about 2.8% from the prior quarter.
Tesla also said it deployed 13.7 gigawatt-hours (GWh) of energy storage capacity through its commercial and residential battery-storage systems. The company deployed 13.5 GWh last quarter.
While the delivery beat is encouraging, as evidenced by the market's reaction, the real test will come on Oct. 21, when Tesla reports its full third-quarter earnings and holds a conference call with analysts.
Image source: Tesla.
EVs are no longer part of the core business moving forward
While Tesla helped commercialize electric vehicles in the U.S. and still accounts for the bulk of its revenue, the business is no longer part of Tesla's investment thesis.
To put things into perspective, Tesla in 2025 generated total revenue of nearly $95 billion and $1.08 diluted earnings per share. The company currently trades at nearly a $1.5 trillion market cap, so it's tough to say that the EV business is driving the stock.
Furthermore, part of the better-than-expected deliveries in the third quarter can be attributed to an improvement in the broader EV market.
NASDAQ: TSLA
Key Data Points
As oil prices have surged due to the Iran war, that's created a better proposition for EVs. The renewables sector could see increased investment in the coming years, due to national security concerns exposed by the Iran war.
It's all about robotaxis and humanoid robots
As most people who follow Tesla now, the future of the business and stock at this valuation is fully self-driving (FSD) robotaxis and humanoid robots, which the market believes Tesla holds a big advantage in.
Tesla has already launched its robotaxi fleet in seven markets: Austin, San Francisco, Dallas, Houston, Miami, Orlando, and Tampa. Tesla also recently launched the Cybercab, a two-seated vehicle with no steering wheel, manual brakes, or side mirrors.
Still, it doesn't seem like Tesla has achieved fully unsupervised FSD yet, or at least it hasn't fully rolled it out in its robotaxi fleet. Most of the new markets are geofenced and involve some level of remote monitoring.
Meanwhile, Tesla's Optimus humanoid robots, which will supposedly be able to perform household chores and which Tesla CEO Elon Musk believes will be the company's "biggest product ever," have not yet been rolled out.
Limited manufacturing of Optimus has begun, but it could be a long process before it reaches wide-scale production because the company essentially has to build a supply chain for robots from scratch.
So, while the improvement in the EV business is certainly good news, I don't think it's a long-term driver of the stock.
What will be more important on Oct. 21 is when Musk and the rest of Tesla's management team provide an update on robotaxis and Optimus.
Given the stock's valuation, I think investors should wait for more evidence that both robotaxis and Optimus can scale effectively before buying.
The timeline for these products seems to be constantly changing, and there’s still no guarantee that each will work as effectively or be as successful as the market currently believes.
Investors have grown impatient. Tesla stock has underperformed the broader market over the past five years and is down roughly 15% this year.