Electric vehicle (EV) and tech giant Tesla (TSLA Quick QuoteTSLA - Free Report) is set to release its vehicle deliveries report for the second quarter of 2026 soon. After strong delivery growth till 2023, Tesla witnessed a year-over-year fall in annual deliveries in 2024 and 2025 amid stiff competition from Chinese players like BYD Co Ltd (BYDDY Quick QuoteBYDDY - Free Report) , an aged vehicle lineup and slower-than-expected adoption of zero-emission vehicles. In the last two years, Tesla saw its deliveries rise on a yearly basis only for three quarters. But the delivery scenario appears to be stabilizing now.

In the last reported quarter, Tesla delivered 358,023 vehicles, up 6.3% year over year. Management pointed out that Tesla ended the quarter with its highest first-quarter order backlog in over two years.

Tesla Q2 Delivery Expectations

The Zacks Consensus Estimate for second-quarter deliveries is 402,456 units, implying an increase of roughly 12% and 5%, respectively, on a sequential and a yearly basis. Model 3/Y deliveries (which form the bulk of deliveries) are estimated at 392,221 units, up from 347,893 units in the first quarter of 2026 and 373,728 units in the year-ago period.

Demand trends have strengthened across key international markets. In China, where Tesla commands a huge presence, deliveries rebounded strongly in May. Per the data from the China Passenger Car Association, as cited in Teslarati, Tesla sold 47,281 vehicles at retail in China last month, representing a 22.5% increase from the same month last year. The figure also marked a sharp 82.2% jump from April. With that, the company snapped a two-month run of year-over-year sales declines while also maintaining robust export volumes from its Shanghai manufacturing facility.

Europe was even more encouraging, with France reporting its best May on record and registrations soaring more than 655%. Strong gains were also seen in Norway, Spain, Denmark, Portugal and Sweden. Despite softer U.S. demand, robust international performance helped offset the weakness.

Given the overseas delivery strength and improved year-over-year and sequential projections on total deliveries, Tesla seems to be rallying ahead of its delivery results. Yesterday, shares of Tesla were up more than 8%.

TSLA Q2 Energy Deployments Also on Deck

Tesla's energy segment has emerged as one of the company's most resilient businesses. The company deployed a record 46.7 GWh of energy storage in 2025, up 50% year over year, and expects deployments to increase again in 2026. In the first quarter of 2026, energy storage deployments were 8.8 GWh. The Zacks Consensus Estimate for second-quarter deployments is pegged at 11.8 GWh, reflecting an uptick both sequentially and yearly. To support rising demand, the company is expanding production capacity through a new Megapack factory near Houston and plans to launch its next-generation Megapack 3 system later this year.

Tesla’s Price Performance & Valuation

Year to date, the stock has declined more than 8%. That’s because Tesla is no longer positioned just as an EV giant.

Image Source: Zacks Investment Research

CEO Elon Musk has repositioned Tesla as a multi-layered tech company. Its narrative and valuation are now heavily centered around artificial intelligence (AI), robotaxis and humanoid robots like Optimus.

Image Source: Zacks Investment Research

TSLA’s Big Bets on AVs & Robots Face a Slow Reality

Just in the final quarter of 2025, Musk said robotaxis would be rolled out in seven U.S. cities by mid-2026. On the first-quarter earnings call, Musk shifted the timeline to a dozen states by year-end. Such inconsistencies and a history of missed timelines make it difficult for many investors to keep faith in the stock. And then there’s competition. Alphabet’s (GOOGL Quick QuoteGOOGL - Free Report) Waymo is already operating Level 4 autonomous systems across multiple cities, while Tesla is still largely running supervised autonomous driving.

The story is not much different when it comes to robotics reality. In early 2025, Tesla aimed to produce 10,000 Optimus robots by the end of that year. By early 2026, none were doing meaningful work. On the first-quarter earnings call, Musk admitted production will be “quite slow” and said it’s “literally impossible to predict” output this year. 

On top of that, Tesla lifted its capital expenditure forecast from $20 billion to $25 billion. Musk argued that this “very significant” increase in capex is justified by a much larger future revenue opportunity. That may sound compelling—but it’s still a bet on a future that remains vague and pushed further out.

Investor Takeaway

Yes, Tesla's delivery trends are improving, but deliveries are no longer the company's central growth story. Its energy storage business is also performing well, though it still accounts for a relatively small portion of overall revenue.

The bigger picture remains challenging. Tesla is trying to execute on multiple ambitious initiatives simultaneously—from EVs and AI to robotics and autonomous driving—but progress has been uneven. At the same time, higher capital spending, the prospect of negative free cash flow and delayed timelines continue to weigh on investor sentiment. As such, this may not be the right entry point for new investors.

That said, Wall Street expects revenue and earnings growth to resume in 2026 and 2027. Given these long-term growth prospects, existing investors may consider holding the stock.

Image Source: Zacks Investment Research

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.