Tesla Just Delivered Fantastic News for Investors, but Don’t Rush Out and Buy the Stock
Anthony Di Pizio, The Motley Fool
Tue, July 7, 2026 at 12:35 AM GMT+5:30
4 min read
- TSLA
+6.69% - NVDA
+0.37%
Despite a 9% gain in the benchmark S&P 500 so far in 2026, Tesla (NASDAQ: TSLA) stock has moved in the opposite direction, posting a 12% loss (as of market close on Thursday, July 2). The company is coming off two straight years of declining electric vehicle (EV) sales, so investors are understandably cautious
But on July 2, Tesla reported its EV deliveries for the second quarter of 2026 (ended June 30), blowing away Wall Street’s expectations. They also grew for the second consecutive quarter, which suggests this critical part of Tesla’s business might finally be recovering
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That said, Tesla stock is trading at a sky-high valuation, which makes it a very tough investment despite recent improvements in its EV sales. Here’s why it probably isn’t a good buy right now
Tesla’s EV sales appear to be recovering
Tesla delivered 1.79 million EVs in 2024, which was a 1% decline from the previous year. Sales fell at an even faster pace of 9% in 2025, with deliveries coming in at just 1.63 million. EV sales still account for over 70% of Tesla’s revenue, so the declines put a real dent in the company’s earnings, which plummeted by 47% last year alone
Fortunately, the electric vehicle business seems to be recovering. Tesla delivered 358,023 cars during the first quarter of 2026, which was up 6% from the year-ago period. And on July 2, the company announced 480,126 deliveries for the second quarter, which was up 25%. It also topped Wall Street’s average forecast of around 406,000 deliveries by a very wide margin
Geopolitical tensions in the Middle East have sparked a surge in gas prices since February, likely benefiting Tesla’s sales during the second quarter as more consumers made the switch to an EV. However, gas prices have started to decline thanks to an ongoing ceasefire between the U.S. and Iran, so it’s unclear whether this tailwind will extend into the rest of 2026
The increasingly competitive landscape has been Tesla’s biggest challenge over the last couple of years, as a raft of low-cost EV brands has flooded important markets like China and Europe. The company has responded by launching cheaper versions of its flagship Model 3 and Model Y EVs, but it still can’t compete with China-based BYD, which sells its entry-level Dolphin Surf for under $30,000 in Europe
