Tesla (TSLA) delivered 486,532 vehicles in the third quarter, beating the 456,896 Wall Street expected by 29,636. Shares rose 4.65% on Friday, October 2, to close at $370.59. A rebound in Europe drove the beat, and Tesla is now on course to end two straight years of falling sales.
Europe did the heavy lifting
Tesla’s EU registrations rose by about two-thirds in January–August from a year earlier, and the Model Y became France’s best-selling car across all powertrains in September, a first for Tesla. That offset weaker demand in the US and China. Tesla needs 311,448 more deliveries in the fourth quarter to avoid a third annual decline, fewer than it has delivered in any quarter since mid-2022.
Rivian (RIVN) also beat third-quarter delivery estimates on Friday and kept its annual forecast.
Tesla’s gross margin tells a different story
Volume is not the issue. Margin is. Tesla’s gross margin was 16.83% in the second quarter, down from 21.08% in the first quarter and below the 17.24% of a year earlier, even though Q2 deliveries were a record.
On the Q2 2026 earnings call, finance chief Vaibhav Taneja said the first quarter had included a $230 million benefit from warranty true-downs and some tariff relief that did not repeat, and that higher interest rates pushed up subvention costs. Production also trailed the 486,761 estimate at 464,391, so deliveries ran about 22,000 above output.
More cars, a thinner margin. That is the number to watch.
Tesla stock: where the Street stands
The mean price target is $396 across 38 estimates, about 7% above Friday’s close. It was $421 on June 30. Holds are the largest group at 20, ahead of 15 buys and 4 outperforms, with 2 underperforms and 2 sells.
Tesla reports on October 21 after the close. A gross margin above last year’s third-quarter level of 17.99% would indicate improved company-wide gross profitability. Another print near 16.83% would show that margin pressure persists despite the delivery beat.
So what is Tesla stock actually worth?
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