Should You Buy Tesla Stock Before Oct. 2?
Tesla stock could be headed for a sharp correction if it doesn’t commercialize its robotaxi and humanoid robot soon.
Tesla (TSLA 0.61%) stock has soared by 65% over the past year and is closing in on a new record high. Investors are enthusiastic about the company’s innovative product pipeline, which includes an autonomous robotaxi called the Cybercab and a humanoid robot called Optimus. In fact, CEO Elon Musk believes these new platforms will make Tesla the most valuable company in the world one day.
But 74% of the company’s revenue still comes from selling passenger electric vehicles (EVs) like the Model 3, Model Y, Model S, Model X, and Cybertruck. Unfortunately, sales have plummeted this year as manufacturers of affordable EVs are snatching market share from Tesla in many key markets around the world.
On or around Oct. 2, Tesla will tell investors how many EVs it delivered to customers during the third quarter of 2025 (ended Sept. 30). According to Wall Street, the number will be a slight improvement over the first- and second-quarter figures, so should investors buy Tesla stock ahead of the release?
Image source: Tesla.
Tesla’s EV deliveries likely shrank yet again
Tesla delivered 720,803 EVs during the first half of 2025, which was down 13% from the same period last year. This led to a 14% decline in the company’s revenue and a 31% crash in its earnings during the same period, which is concerning because the EV business supplies the cash flow to develop new products like the Cybercab and Optimus.
Competition is the main reason for Tesla’s sluggish sales. In Europe, for example, the company’s sales plunged by 36% year over year during August, despite EV sales growing by 30% in the region overall. In other words, Tesla is rapidly losing market share to other brands.
China-based BYD is one of those brands. Its sales tripled across Europe during August, as its low-cost EVs resonated with consumers who are increasingly budget conscious.
Wall Street’s consensus estimate suggests Tesla delivered around 445,000 EVs worldwide during Q3, which would be down 3.9% from the year-ago period. While that is a shallower decline than the company experienced in the previous two quarters, it’s mainly because analysts predict American consumers were front-running the end of the $7,500 EV tax credit, which expires on Oct. 1.
In other words, some of Tesla’s third-quarter sales might have been pulled forward from the fourth quarter, which could lead to a much weaker result to close out the year.
It’s still early days for Tesla’s new products
Investors who are banking on the success of Tesla’s other product platforms might be waiting a while. The company’s full self-driving (FSD) software isn’t approved for unsupervised use anywhere in the U.S. right now, and without clearing that hurdle, the Cybercab robotaxi won’t be hauling any passengers when it hits the road next year.
In the meantime, Tesla is scaling up its autonomous robotaxi business using its passenger EVs. These cars are fitted with a supervised version of FSD, which requires a human safety officer in the passenger seat who can take control if necessary. This places Tesla behind competitors like Alphabet‘s Waymo, which is already completing over 250,000 paid, fully autonomous trips every week across five U.S. cities.
Moving onto the Optimus humanoid robot, Musk predicts this product platform will bring in a staggering $10 trillion in revenue for Tesla over the long term. He thinks humanoids could outnumber humans by 2040, because of their versatility in both business and household settings.
However, like the Cybercab, Optimus is still a while away from making a real contribution to Tesla’s financial results. Musk expects production to start next year, but he says it could take five years to reach the company’s target output of 1 million units annually.
Should you buy Tesla stock before Oct. 2?
Declining EV deliveries aside, I think there is an even bigger reason to be cautious about Tesla stock ahead of Oct. 2: its valuation.
The stock trades at a sky-high price-to-earnings (P/E) ratio of 244, making it 7 times more expensive than the Nasdaq-100 technology index, which trades at a P/E ratio of 32.6. It also makes Tesla the priciest stock in the “Magnificent Seven,” which is a group of tech giants leading various segments of the artificial intelligence (AI) boom:
TSLA PE Ratio data by YCharts
High valuations are typically reserved for companies generating significant growth. Since Tesla’s earnings are currently shrinking, its premium to the Magnificent Seven is extremely difficult to justify. In my opinion, this leaves the stock open to a significant potential decline in the future, especially if there are bumps along the way to commercializing the Cybercab and Optimus.
Therefore, it probably isn’t a wise decision to buy Tesla stock ahead of Oct. 2, and it might be best to avoid it until those new products are officially generating revenue.
Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends BYD Company and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.