Why Tesla's Stock Rally Ignores EV Delivery Troubles: The Robotaxi Factor

The Market’s Shift in Focus

Tesla’s investment narrative has undergone a dramatic transformation. While the electric vehicle maker faces tangible headwinds in its core business, Wall Street and retail investors alike have redirected their attention toward what they perceive as the company’s genuine long-term growth engines: autonomous robotaxis and humanoid robots. This recalibration reveals a crucial disconnect between Tesla’s present struggles and its speculative future.

Understanding the EV Delivery Setback

The numbers paint a sobering picture for Tesla’s traditional EV operations. In the fourth quarter of 2025, the company delivered 418,227 vehicles—missing Wall Street’s consensus estimate of 426,000 by approximately 2%. More concerning, however, is the year-over-year collapse: Q4 deliveries dropped nearly 16% compared to the same period in 2024. For the full year, Tesla managed to deliver 1.64 million vehicles, representing a 9% decline from 2024’s performance.

Model 3 and Model Y vehicles accounted for 97% of fourth-quarter shipments, underscoring Tesla’s limited product diversification. Deliveries of premium models—the Model S, Model X, and Cybertrucks—remained negligible throughout the quarter.

The culprits behind this weakness are industry-wide challenges amplified by policy shifts. The Trump administration’s legislative spending package eliminated the $7,500 federal electric vehicle tax credit, a program that had served as a critical purchase incentive. Simultaneously, however, global competition has intensified dramatically, with Chinese manufacturer BYD recently surpassing Tesla to become the world’s largest EV maker by volume.

Where Investor Enthusiasm Actually Lies

Despite these troubling deliveries metrics, Tesla’s stock has largely shrugged off these concerns—a testament to where investor conviction truly resides. The real attention has pivoted to two emerging verticals: the robotaxi network and Optimus humanoid robots.

Tesla initiated limited robotaxi operations in Austin and San Francisco last year, marking a milestone CEO Elon Musk had promised for years. The company plans geographic expansion to five additional cities. The significant breakthrough came in December when Musk confirmed that certain Austin robotaxis were operating fully autonomously without any human supervision or safety monitors—a critical step toward commercial viability.

The competitive advantage Tesla claims here is manufacturing cost efficiency. According to Bloomberg analysis, Tesla can supposedly produce fully autonomous vehicles at substantially lower costs than competitors like Waymo, potentially reshaping the economics of autonomous transportation.

Analyst projections reflect this enthusiasm. Wedbush’s Dan Ives anticipates Tesla robotaxis operating across 30 cities by end-of-2026. Cathie Wood of ARK Invest maintains an aggressive $2,600 price target for 2029—implying enormous upside from Tesla’s current $450 share price—with robotaxi revenue projected to comprise 90% of the company’s enterprise value and earnings by that date.

The humanoid robot initiative adds another dimension to the bull case. Optimus could theoretically generate substantial economic value through household automation, though broader-scale production remains in early stages.

The Valuation Question

Tesla’s $1.5 trillion market capitalization increasingly depends on these speculative bets. However, there’s a critical consideration worth examining: the company currently trades at over 200 times forward earnings—an extraordinarily steep valuation for a firm that must still successfully commercialize both robotaxi networks and humanoid robots at scale.

The technology roadmap remains uncertain. Questions persist regarding whether Tesla will perfect autonomous capabilities, at what timeline this occurs, and what adoption rates might look like in real-world deployment. These unknowns represent significant execution risk, particularly at current valuation multiples where little room exists for disappointment.

For cautious investors, however, the risk-reward asymmetry at these levels appears unfavorable relative to the company’s fundamental challenges in its core EV business and the uncertainty surrounding newer initiatives.