TSLA fundamentals show weakness: declining deliveries reduce cash flow for future tech investment, and energy storage growth is decelerating with lower margins.

We have huge news for Tesla stock investors, as the company has announced its quarterly production and delivery figures , and the gigawatt figures that have been released. I will compare them with the figures announced by the company in the same period last year, and I will discuss some of the macroeconomic factors that were positive for Tesla and some of the factors that were negative for it .

Next, we will take a look at Tesla's valuation and discuss how important its car deliveries and production are now that the company has shifted its focus to self- driving car technology.

Tesla announced its figures for the third quarter of 2026, recording 486,532 deliveries. Deliveries are an indicator of sales, and this figure is lower than it was last year.

In the same quarter last year, Tesla delivered 497,099 cars. So, there is an annual decrease of approximately 11,000 units compared to the same period last year.

Interestingly, the other models, which include the Cybertruck and the S and X models (the latter two are no longer in production), recorded 8,295 deliveries compared to 15,933 in the same quarter last year , roughly half.

These are cars with a higher average selling price, twice the average selling price of the Model 3 and Model Y, which now make up the bulk of Tesla's deliveries.

Remember that Tesla halted production of the Model S and X to make room for the CyberCab and robots the company mentioned earlier this year. There are two main factors that have affected Tesla's sales this year compared to the same quarter last year .

Firstly, interest rates today are much higher than they were a year ago. When you think about buying a car, most people finance that purchase. Therefore, higher interest rates mean higher monthly payments, and consequently fewer individuals are interested in buying cars in general.

Secondly, the tax credit for electric vehicle sales was cancelled last year. Therefore, this year we did not get that tax credit, which was an incentive for some people to buy an electric car, because it must be remembered that when comparing electric cars to regular internal combustion engine cars, electric cars are more expensive .

Another key factor supporting electric car sales is rising oil prices. Electric cars may be more expensive to buy initially, but they reduce overall running costs because you spend less money on fuel compared to charging.

With rising oil prices, the equation changes in favor of electric cars because you save more per month when filling up with fuel compared to charging the battery. Therefore, this was a positive incentive for Tesla and all electric car manufacturers, because high oil prices encourage more individuals to consider buying at least one electric car.

So, I know many of you are thinking: "Well, that doesn't really matter to Tesla. It's the story of self- driving cars. The bulk of the company's valuation comes from its ambitions in self- driving cars and robots.

So, car sales aren't the point." I largely agree with this view, but I would add that in order for Tesla to obtain the liquidity to invest in next-generation technologies, it needs to sell cars or turn to you, as investors and shareholders, to ask for more money.

What do you prefer? Would you prefer Tesla to sell cars and use that cash flow to invest in self- driving cars and robots, or for Tesla to turn to investors to sell more shares or borrow tens of billions to get the liquidity needed to invest in autonomous technology?

Therefore, this is the main reason why car sales are so important to Tesla, as they are the primary source of its cash flow that it can invest in next-generation technologies. Therefore, the better car sales become, the greater its ability to invest in future technologies.

This also expands the user base. The more Teslas buy , the more likely they are to sign up for supervised self-driving and pay the $99 monthly fee, an amount I expect Tesla to raise as the technology improves.

They will raise that monthly premium to access the self-driving feature, and they already have more than a million people paying for it.

Therefore, the more Teslas buy, the greater the market opportunities to sell self-driving technology features to those people. So, this is still important for Tesla, although I agree that the bulk of its valuation comes from its ambitions in the field of self- driving cars.

Energy storage has also become an important category for Tesla amid declining car sales. Energy storage is one category that continues to grow, and the company deployed 13.7 gigawatt-hours of energy storage products in the last quarter.

This represents an increase of approximately 10% over the 12.5 gigawatt-hours they deployed in the same period last year.

Profits here are likely to be lower because tariffs on these products have risen significantly, meaning Tesla has had to pay higher prices, and therefore profit margins in this category are likely to decrease.

Moreover, the growth rate in this category is also declining.

Again, this is another important category for Tesla because it generates cash flow that the company can invest in more innovative areas. Tesla stock is now trading at a forward price-to-earnings ratio of 171, about five or six times the average of S&P 500 stocks , and about four or five times that of some AI companies such as Amazon, Microsoft, and others.

It is about 10 times more expensive on a forward price-to-earnings basis compared to Nvidia.

It is a very expensive company because investors expect a lot of success in self-driving car technology. So, do n't be surprised if Tesla releases this technology to the market and the stock price doesn't rise. Isn't that so?

And that's exactly what's happening with Tesla here. The stock is already trading at extremely high valuations as investors anticipate the success of its self-driving car technology.

It is no longer just a question or a matter of curiosity; investors now believe this is inevitable. That will inevitably happen. It's just a matter of time, that's all . Investors have become complacent in their expectations that this will be an inevitable success, and so the stock is now priced in at a forward price-to-earnings ratio of 171.