Tesla’s October Sales Were Awful. The Stock Is Rising.

Tesla plans to produce its Cybercab robo-taxi in 2026. Coming into Wednesday trading, Tesla stock was up about 9% year to date. (Photo by HECTOR RETAMAL/AFP via Getty Images)

Investors knew the fourth quarter would be tough for electric vehicle makers like Tesla . They might not have known how tough—or how Tesla stock would react.

In October, Tesla sales fell 23% year over year in four markets, North America, Europe, China, and South Korea, according to industry data tracked by Wells Fargo analyst Colin Langan.

North American October sales, at an estimated 45,000 vehicles, dropped 25% from the nearly 60,000 cars sold in September. The expiration of the U.S. federal $7,500 purchase tax credit helped September’s sales, with buyers looking to get the benefit before it was gone.

“We expected to see the payback on U.S. October deliveries after the Inflation Reduction Act credits ran out; however, foreign markets continue to show weakness,” wrote Langan, which leaves “downside” to fourth-quarter delivery estimates.

Wall Street currently projects fourth-quarter Tesla deliveries of 440,000 vehicles, according to FactSet, down from almost 500,000 delivered in the third quarter. Tesla delivered about 496,000 cars in the fourth quarter of 2024.

Falling estimates or a delivery miss might not matter all that much to Tesla shares. Tesla EV sales are on pace to fall year over year for the second consecutive year globally and for the first time ever in China.

Despite falling sales, Tesla stock hit an all-time high in December 2024 and was up about 9% year to date and up about 26% over the past 12 months, entering Wednesday trading.

Investors are simply more focused on AI applications, such as self-driving taxis and humanoid robots.

There is a good reason for that: It’s what Tesla’s board is focused on, too. Three of the four operational goals in Elon Musk’s new pay award are focused on AI. To earn some 425 million shares, he needs to sell cars, but also 10 million driver assistance subscriptions and one million robots, while deploying one million robo-taxis.

Tesla stock was up 0.7% at $442.68 in premarket trading, while S&P 500 and Dow Jones Industrial Average futures were up 0.4% and 0.2%, respectively.

Shares of the EV maker have been listless since the company’s Nov. 6 annual meeting, when investors learned that shareholders voted in favor of CEO Elon Musk’s giant pay package. Entering Wednesday trading, shares were down about $6 since the meeting, falling three times and rising once.

With Musk secured as their CEO, investors are waiting for more news about AI before bidding up Tesla stock again.

Langan, for his part, still cares about car sales. He rates Tesla shares Sell and has a $120 price target for the stock.

Write to Al Root at allen.root@dowjones.com