Tesla Inc (NASDAQ:TSLA) beat analyst expectations for third-quarter deliveries thanks to a short-term surge in demand as the federal EV tax credit expired. Deepwater Asset Managing Partner and co-founder Gene Munster says investors should throw this figure out and throw the fourth-quarter delivery figure out as well.
Tesla's Focus On Autonomy
With automotive companies likely to see less demand for electric vehicles with the $7,500 federal tax credit gone, Munster cautions on how much attention should be put on the third and fourth quarter delivery figures.
Munster said Tesla may have seen a 35% quarter-over-quarter jump in U.S. sales from the tax credit, meaning the positive number is one investors "should largely throw" out.
"My ‘throw it out' logic misses a bigger point; the future will be autonomy and the ability to get EV units in the market profitably is a key competitive advantage," Munster said in a blog post.
Munster said "what really matters" is what Tesla is working on for success in autonomous vehicles.
"One overlooked ingredient to being successful in autonomy is having EVs on the road, and carmakers need to build those EVs profitably."
The investor said that with the latest quarter delivery figures, there are more Teslas on the road than three months ago.
Munster said outside of some other EV companies like BYD, most automakers are in denial about the importance of autonomy, believing this is 10 years away and that there is time to increase investments.
"I see this logic as risky, given autonomy progress is likely to be exponential, not linear. This means over a short period of time we should see rapid improvement in the technology."
Munster said the lower-priced Tesla Model 2 isn't likely to be a meaningful contributor to deliveries until late 2026, but could impact future demand as consumers wait for the vehicle.
The investor's estimate calls for deliveries to fall 9% year-over-year in 2025, then rise 10% in 2026 and 22% in 2027.
Munster said the global EV market could grow 15% to 20% in 2026.
EV Tax Credit Expiration A Win For Tesla
Automakers may experience lower demand for electric vehicles in the immediate quarters, but Munster sees a long-term positive impact of the expiration for Tesla.
"The ending of the U.S. EV tax credit will prove to be a long-term win for Tesla, given it lured traditional automakers into slowing their investment in electrification while Tesla builds an advantage in autonomy," Munster said in a blog post.
Munster said EV adoption will slow with the expiration of the tax credit, with a new estimate predicting that only 25% of new cars sold in the U.S. in 2030 will be fully electric, compared to an estimate of 50% five years ago.
While overall demand may drop, Munster sees legacy automakers such as General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F) shifting their focus away from electric vehicles.
"Faced with softening EV demand and mounting losses, traditional automakers have dialed back investments."
Munster also highlighted Volkswagen (OTC:VWAGY) in his post as the company previously said it would like to have 50% of its sales be EVs by 2030, but is now shooting for 20%.
Some automakers are also choosing to focus more on profitability instead of overall unit sales and market share, Munster added.
Read Next:
Image created using artificial intelligence via Midjourney.
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
