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Tesla (TSLA) disappointed investors with its Q4 production and deliveries report, reporting a 15.7% yr/yr drop in deliveries to 418,000 vehicles. This figure fell short of the already muted expectations on the Street, yet the stock appears to be shrugging off the miss, trading slightly higher as investors look past current auto weakness to future AI drivers.

• Deliveries of 418,000 vehicles marked a sharp deceleration from the record 497,000 vehicles delivered in Q3. The Q3 surge was largely driven by a pull-forward in demand as buyers rushed to secure tax credits before their expiration at the end of September, creating a difficult comparison for Q4.
• The weak Q4 performance occurred despite the October launch of a more affordable "Standard" Model Y. While intended to stimulate volume with a lower price point, early sales data suggests customers may be holding out for the anticipated "Juniper" design refresh rather than opting for the de-contented current model.
• TSLA’s energy business provided a rare bright spot, deploying a record 14.2 GWh of storage products, up from the previous record of 12.5 GWh in Q3. Growth in this segment is being catalyzed by the continued ramp-up of the Lathrop Megapack factory and strong utility-scale demand.
• Competitive pressures continue to mount, particularly in China where BYD Company (BYDDF) has solidified its lead in total volume and new entrants like Xiaomi are gaining traction. In Europe, legacy automakers like Volkswagen (VWAGY) are aggressively discounting to protect market share.
• Despite the 15.7% delivery decline and a second consecutive year of falling vehicle sales, Tesla stock has rallied approximately 37% since early September.

Briefing.com Analyst Insight:

TSLA's Q4 deliveries report confirms a shrinking automotive business, heavily impacted by the post-tax credit demand void and stiff competition from BYDDF, Rivian (RIVN), and others. The lower-priced Model Y launch proved insufficient to counter these headwinds. Despite this, the stock’s 37% rally highlights a disconnect between fundamentals and sentiment; investors are pricing TSLA as an AI/Robotics play (Cybercab, Optimus) rather than an automaker. While the Energy division is a legitimate growth pillar, it cannot justify the valuation alone. We remain skeptical given the "AI premium" leaves no margin for error against risks like tariffs, Musk's polarizing activism, and global price wars. Until organic delivery growth stabilizes without deep discounts, we would remain cautious on the stock.