Tesla Faces Dual Headwinds as Delivery Forecasts Dim and Key Contract Shrinks

Tesla is concluding the 2025 fiscal year under significant pressure, grappling with two substantial setbacks. The electric vehicle manufacturer has publicly tempered its own delivery expectations while simultaneously seeing a multi-billion dollar battery material contract for the Cybertruck evaporate. These developments cast doubt on the resilience of Tesla's growth narrative in the face of underwhelming sales and model rollouts.

The market's response to these developments has been muted yet decisively negative. Tesla's share price currently hovers around $454, marking a decline of approximately 6% from its recent peak of just over $486. While the stock is down about 6% on a weekly basis, it maintains a year-to-date gain of nearly 23%, indicating the current pullback is occurring from a position of prior strength.

From a technical analysis perspective, the equity continues to trade well above its medium-term moving averages, suggesting the broader upward trend remains intact. However, a 14-day Relative Strength Index (RSI) reading near 74 signals overbought conditions. This increases the stock's vulnerability to further declines should upcoming data points, particularly the Q4 delivery figures, underperform the newly published consensus.

Revised Delivery Consensus Points to Annual Decline

In an unusual move, Tesla published a consolidated analyst consensus for fourth-quarter vehicle deliveries on its investor relations page. This consensus points to roughly 422,850 deliveries for the final quarter—a figure about 15% lower than the same period last year and notably below the prior market consensus of approximately 445,000 units gathered by Bloomberg.

The outlook for the full year 2025 is also contractionary. The internal consensus estimates around 1.6 million vehicles delivered, representing a drop of more than 8% compared to 2024. This would mark the second consecutive annual decline in deliveries, a stark contrast to the hyper-growth years of the past.

Market interpretation suggests this publication of disappointing figures acts as a deliberate attempt to manage expectations ahead of the official Q4 report in early January. By steering attention toward the lower consensus mark of 422,850 vehicles, management may be trying to cushion the impact of potentially missing the originally higher estimates.

Should investors sell immediately? Or is it worth buying Tesla?

Cybertruck Hurdles Trigger Massive Contract Reduction

Compounding the delivery concerns, a major supply agreement with South Korean cathode producer L&F Co. has been drastically scaled back. The deal, originally valued at $2.9 billion for high-nickel cathodes destined for the Cybertruck's 4680 battery cells, has been reduced by approximately 99% to a mere $7,400.

L&F attributed this move to repeated delays and weaker-than-anticipated demand for the Cybertruck. This highlights the ongoing difficulties in ramping up production for this model and the persistent bottlenecks in the 4680 cell technology. Although the Cybertruck was envisioned as a key growth driver for 2025, supply chain data now implies that actual production volumes are falling significantly short of initial targets.

This creates a tension between operational reality and the optimistic long-term narratives maintained by some analysts. For instance, Canaccord Genuity recently reaffirmed a "Buy" rating with a $551 price target, citing potential in AI and software segments despite current challenges in the core vehicle and battery businesses.

Outlook: Q4 Report as a Crucial Stress Test

In the opening days of the new year, Tesla will release its official production and delivery report for the fourth quarter of 2025. The critical question is whether the actual figures will align with the published consensus of 422,850 vehicles. Should they match, the negative news may already be priced in, allowing the market to shift focus to the strategic outlook for 2026—including the timeline for the more affordable "Model 2" platform and a clear plan to stabilize Cybertruck production.

If, however, the results fall noticeably short of this newly set benchmark, confidence in Tesla's medium-term sales and margin targets is likely to erode further. For the stock, this would represent another test of current valuation levels, revealing how much leeway investors are willing to grant the software and AI narrative while the core automotive business struggles.