Tesla Inc. (NASDAQ:TSLA) will likely face near-term delivery challenges before experiencing significant growth in 2026, according to Gene Munster, Managing Partner at Deepwater Asset Management.
What Happened: Munster wrote on X Wednesday that CEO Elon Musk “is bullish on Tesla’s output expansion, expecting it to double in the next couple of years.” However, Munster forecasts Tesla deliveries will decline 5% in 2025 before surging 40% in 2026.
This prediction comes as Musk announced Tesla’s commitment to doubling U.S. vehicle production within two years “in support of the policies of President Donald Trump” and to “demonstrate our confidence in the future of the United States.”
The expansion timeline aligns with previous company statements. Tesla mentioned plans to increase capacity by 60% this year during its last earnings report, which Munster notes implies “an additional 25% capacity growth in 2026.”
Munster acknowledged this expansion would be “negative for near-term cash flow and positive for long-term margins.” The key question, he added, is “will consumers buy that increased capacity?”
Why It Matters: Tesla faces significant headwinds. According to S&P Global Mobility data, the company’s U.S. registrations dropped 11% in January while competitors saw a 44% increase. European registrations fell by more than 50% year-over-year.
Tesla’s stock has declined over 50% from recent highs, with protests emerging in the U.S. and Europe criticizing Musk’s political activities. The company’s first-quarter earnings report in April may provide crucial insights into whether it can reverse these negative trends.
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