Tesla breaks Q3 delivery records, but headaches loom

Tesla  (TSLA) closed out the third quarter with record vehicle deliveries, exceeding expectations and also reigniting faith in the growth of its core electric vehicle business.

Yet, even as the company beat consensus, Tesla’s shares remain volatile, fueled by lawsuits, regulatory risks, and the political activities of CEO Elon Musk, driving uncertainties and criticism.

Tesla’s stock trajectory is more of a push-and-pull, with the stock up nearly 27% over the past month and 36% over the last quarter but falling 2.4% this week. Over the past year, the stock has gained more than 70%, making it a closely watched stock.

Analysts' optimism drives Tesla stock

On Thursday, Tesla reported Q3 deliveries of 497,099 vehicles, up 12% from consensus forecasts of around 443,000, which were at the high end of bullish expectations, according to Morgan Stanley.

The strong demand was likely driven by US consumers wanting to take advantage of the $7,500 EV tax credit, which expired on Sept. 30, and by stronger deliveries in Europe and China, analysts said.

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JP Morgan lifted the firm’s price target to $150 from $115, while maintaining an Underweight rating. The firm also noted that Tesla's Q3 earnings per share are expected to come in at around $0.59, above the $0.50 consensus but still down 18% year-over-year, as reported by TheFly.

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“It is too soon to declare Tesla as having sustainably returned to growth in its core business,” the bank wrote.

Meanwhile, UBS acknowledged the delivery beat, but cautioned that the Q3 deliveries could simply represent a local peak and that the rally may trigger “sell the news” pressure. 

Morgan Stanley remained optimistic, maintaining its Overweight rating and $410 price target for the firm’s shares.

Political relief to lawsuit struggles

Beyond earnings, Tesla remained in the headlines for both political and personal reasons. This week, Republican Senator Bernie Morano said that President Doland Trump is considering tariff relief for U.S.-based automakers, which could benefit Tesla alongside Ford, GM, and Toyota, according to a report from Reuters.

Related: Tesla's record-breaking quarter disappoints investors

Morano said in an interview, “The signal to the car companies around the world is look you have final assembly in the US: we’re going to reward you. For Ford, for Toyota, for Honda, for Tesla, for GM, those are the almost in order the top five domestic content vehicle producers – they’ll be immune to tariffs,” as reported from TheFly.

This relief could ease Tesla’s domestic production at a time when global competitors like Rivian, Mercedes-Benz, and Lucid Group are grappling with trade pressures.

At the same time, Tesla faces legal scrutiny. The parents of a teenager killed in a Cybertruck crash last year sued the company, alleging that the faulty design of its door handles contributed to their daughter’s death after the vehicle caught fire.

The case highlights growing concerns about safety in Tesla’s expanding lineup, even as the company plans to introduce autonomous driving features.

Investors will keeping an eye out for Tesla’s Q3 earnings, which will be reported later this month.

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