By Tesla’s stock fell early Wednesday as data showed a sharp drop in global vehicle sales during October, highlighting continued weakness across key markets even as investors remain fixated on the company’s artificial intelligence ambitions.
Shares were down more than 2% at $429.14 in early trade, while the S&P 500 and Dow Jones Industrial Average rose 0.2% and 0.7%, respectively.
Industry data compiled by Wells Fargo indicated that Tesla’s sales fell 23% year-over-year across North America, Europe, China, and South Korea last month.
North American deliveries alone dropped 25%, with an estimated 45,000 vehicles sold, compared with nearly 60,000 in September.
Analysts attributed part of the decline to the expiration of the US federal $7,500 EV purchase tax credit, which had boosted September sales.
Analysts see deliveries going down again
Wall Street expects Tesla to deliver about 440,000 vehicles in the fourth quarter, according to FactSet, down from roughly 500,000 in the previous quarter and 496,000 during the same period last year.
That would mark Tesla’s second consecutive annual decline in global EV deliveries—and its first-ever yearly drop in China, its largest foreign market.
Despite the slump, Tesla’s stock remains up roughly 9% year-to-date and 26% over the past 12 months, buoyed by enthusiasm around the company’s longer-term AI ambitions rather than its core auto business.
Investors have largely brushed off weaker sales trends, focusing instead on the company’s push into self-driving taxis, robotics, and AI-driven software services.
The focus on AI
At Tesla’s November 6 annual meeting, shareholders approved CEO Elon Musk’s $1 trillion pay package, a performance-linked award that ties compensation to a set of ambitious operational milestones—most of which are related to AI.
Under the new plan, Musk must achieve goals such as selling 10 million driver-assistance subscriptions, deploying one million robo-taxis, and producing one million humanoid robots to receive the full payout of about 425 million shares.
Another major takeaway from the meeting was Musk’s indication that Tesla might need to “build a gigantic chip fab” to secure supply for its next-generation AI processors.
Analysts said such a move would strengthen Tesla’s vertical integration strategy and ensure resilience in the production of the inference brain behind its robotics and AI platforms.
With Musk’s leadership secured, investors are waiting for tangible updates on these AI initiatives before further bidding up the stock.
Tesla’s share performance has been relatively muted since the meeting, falling in three of the four trading sessions that followed.
Fund managers continue to frame Tesla as a technology platform rather than a car manufacturer, betting that scaling high-margin AI and software revenues could eventually outweigh traditional vehicle sales.
The company’s falling sales underscore the growing disconnect between its current fundamentals and its future narrative—a bet that autonomous systems, not car deliveries, will power the next stage of Tesla’s growth.
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