Here’s why the stock market shouldn’t care about Tesla’s delivery numbers

Tesla (NASDAQ:TSLA) saw its stock fall more than 6% as it reported third-quarter 2024 delivery numbers. These were below expectations, but I don’t think investors should worry.

The way I see it, anyone who owns Tesla stock right now should think they are more than just a car company. And if they’re right, weak delivery numbers do nothing to change that.

Delivery

Tesla delivered 462,890 vehicles between July and September. That’s short of the 469,828 other analysts were predicting.

One reason this may be a concern is that Tesla has been focusing on volumes over profits. Until now, the company has been offering various incentives to maintain sales.

Given this, shareholders may expect lower margins. But the delivery numbers coming in below expectations indicate that the plan has not been as successful as investors had hoped.

However, in the end, I don’t think this is a big problem. Even the best businesses face challenges from time to time, but if I were a Tesla shareholder, I would focus elsewhere.

Robotaxis

I think Tesla’s efficiency as an investment comes down to its driverless car segment. Simply put, that should work to justify the current share price.

If possible, the company can generate enough cash to give investors a return on investment at today’s prices. Otherwise, I think the stock looks too big.

This is the vision ARK Invest has for business. By 2029, Cathie Wood’s company expects 90% of Tesla’s profits to come from its robotics business, less than 10% from car sales.

On this basis, ARK expects the stock to be worth $2,600 per share in 2029. If – for whatever reason – the robotaxi performance fails, that price target falls to $350.

Outlook

Tesla is expected to launch its robot in less than a week. And I think this is more important to shareholders than third quarter delivery numbers.

The event has been delayed since August, but I don’t expect this to happen again. However, I realize that there is still a long way to go from unveiling a product to launching it.

The Cybertruck was unveiled in 2019, but the car didn’t go on sale until late 2023. And with driverless cars, there are regulatory issues that need to be addressed.

This is unlikely – Waymo has around 700 self-driving cars already in operation. But that uses a different system, so Tesla’s approval isn’t exactly official.

Don’t worry

As an electric vehicle (EV) company, Tesla has some key advantages over its competitors. But these alone do not seem to be enough to justify the current share price.

In my opinion, the company’s performance as an investment comes down to its robotaxi business. And that’s where I think investors should focus their attention.

I don’t see how weak car sales for a quarter – or even a year – have a significant impact on Tesla’s robot prospects. That’s why I don’t think the market should worry about the latest delivery issues.