Tesla's Biggest Semi Deal Yet: Is TSLA Stock a Buy Now?
A newly formed freight coalition, ZET SCALE, has chosen Tesla TSLA to lead a 2,500-truck purchase of electric Class 8 vehicles, per Teslarati. If fully delivered, the order would roughly double the number of battery-electric heavy trucks now running in the United States. Deliveries are planned over several years and will serve 10 regional hubs, including Los Angeles, Houston, Chicago, Atlanta and the New York-Newark area.
Tesla leads but doesn’t have the deal to itself. PACCAR‘s PCAR Kenworth, RIDE and Volvo Group‘s VLVLY Volvo are also on the supplier list. So, Semi will make up only part of the 2,500 units. But since Tesla is the lead supplier, its share would likely still set a record. It is set to exceed earlier Semi orders, such as Einride’s 500 trucks in August and WattEV’s 370 in May.
Notably, Tesla’s new Semi factory in Nevada opens formally today. Located beside the 4680 battery cell lines at Gigafactory Nevada, the 1.7-million-square-foot facility is built to produce up to 50,000 trucks a year, far more than the orders now coming in.
A Big Deal, But Should You Get Too Optimistic?
Tesla Semi’s history calls for patience. The electric vehicle (EV) and tech giant unveiled the concept in 2017, and the road to volume production has been slow. Pandemic disruptions, supply chain problems and battery production hurdles all got in the way. A limited number of trucks reached early customers such as PepsiCo in 2022, but large-scale output never followed.
Tesla does have advantages most electric-truck startups lack, like deep capital reserves and manufacturing expertise. It also pitches the Semi as cheaper to run per mile than diesel, which is what fleet buyers care about most. But Tesla has a record of missed production timelines, and battery availability remains a constraint. The deal has to be proven in deliveries, not announcements.
Rivals Are Closing In
At Europe’s IAA Transportation show, BYD Co Ltd BYDDY unveiled the ETT 44, a 44-tonne electric tractor with up to 1,000 horsepower and roughly 372 miles of range from a 651 kWh lithium iron phosphate battery. It also brought megawatt-level chargers meant to cut fleet downtime.
Tesla plans to bring the Semi to Europe, with deliveries starting late next year, but only in the standard-range version. Against BYD’s range and charging pitch, that could leave Tesla playing catch-up there.
The Semi is promising and the orders suggest that commercial confidence in the Semi is improving, even if execution risks remain high.
But Tesla is no longer just an EV company. CEO Elon Musk has repositioned Tesla as a multi-layered tech company. Its future is no longer just about vehicles—it’s about artificial intelligence (AI), robotaxis and humanoid robots like Optimus. And that’s where we see big gaps between the promise and the progress.
Ambition Is Running Ahead of Execution
Tesla’s autonomy push is still far from Waymo’s. Its robotaxi network has covered roughly 380,000 driverless miles (as highlighted in its second-quarter earnings release), while Waymo has passed 220 million rider-only miles. The humanoid robot program, Optimus, is also at an early stage. Meanwhile, Tesla expects capital spending in 2026 to top $25 billion, which will keep free cash flow under pressure. The company offers real long-term optionality, but these bets will need to produce meaningful financial returns to justify the spending.
The core business isn’t giving much relief either. Energy deployments and vehicle deliveries are improving, but higher volumes haven’t yet translated into stronger profits. In the last reported quarter, automotive gross margin excluding regulatory credits slipped to 16.3% as pricing pressure continued. Energy storage margins fell even more sharply to 20.4% from 39.5%, partly because of warranty costs and softer industrial pricing.
Tesla’s Price Performance, Valuation & Estimates
Shares of Tesla have declined 15% year to date, underperforming the industry.
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From a valuation standpoint, TSLA trades at a forward price-to-sales ratio of 13.08, way above the industry and its own five-year average. It carries a Value Score of F.
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Tesla’s EPS estimates have been revised downward in the past 90 days.
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Our Take
The record Semi order is a genuine win, but it doesn’t change the bigger picture. Tesla is asking investors to pay a steep premium for autonomy and robotics payoffs that are still far off, while margins shrink, spending climbs and earnings estimates fall. A stretched valuation leaves little room for error. TSLA currently carries a Zacks Rank #3 (Hold). Existing shareholders can stay put, but new investors have little reason to jump in now. They should wait for proof of execution and/or a better entry point.
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This article originally published on Zacks Investment Research (zacks.com).