Buy Tesla Stock Before Jan. 2? Key Factors to Weigh
Should You Buy Tesla Stock Before Jan. 2?
Tesla stock is poised to close 2025 with more than a 25% increase, currently hovering near all-time highs. Investors are eagerly buying shares in expectation of groundbreaking future offerings, such as the Cybercab robotaxi and the Optimus humanoid robot, both slated for launch within the coming years.
Nevertheless, electric vehicle sales still account for over 70% of Tesla’s total revenue, and this essential segment is experiencing significant softness due to surging worldwide competition. The firm is scheduled to disclose its fourth-quarter 2025 EV delivery figures on or about January 2, a report that could significantly sway the stock’s short-term trajectory.
Is it wise to purchase Tesla shares prior to this important announcement?
Two straight years of declining EV sales
In 2024, Tesla managed to deliver 1.79 million electric vehicles, marking a 1% drop from the year before. This represented the company’s initial yearly sales downturn since introducing its pioneering Model S back in 2011. The downward trend intensified in 2025, as deliveries fell 6% year-over-year during the first nine months ending September 30.
Analysts from FactSet project approximately 450,000 EV deliveries for Tesla in the final quarter of 2025 ending December 31. This projection would bring the full-year total to roughly 1.67 million units, signifying a 7% decrease from 2024 levels.
Fierce rivalry poses one of Tesla’s most pressing hurdles at present, particularly in vital regions like China and Europe. Buyers are increasingly choosing budget-friendly alternatives from producers such as BYD, which offer electric vehicles at prices Tesla struggles to compete with. To illustrate, BYD’s base Dolphin Surf model retails for only $26,900 in Europe, while Tesla’s Model 3 base price begins at $44,300.
Consequently, Tesla witnessed a 12% year-over-year plunge in EV sales throughout Europe in November. Stripping out Norway—where figures were boosted by the impending end of an EV tax incentive—Tesla’s November European sales plummeted by more than 36%. The company’s European market share has eroded to just 1.6%, down from 2.4% a year earlier.
Tesla stock trades at a ludicrous valuation
Tesla’s faltering EV sales have triggered a substantial drop in profitability this year, yet its share price keeps rising, pushing its valuation to extraordinary heights. With trailing 12-month earnings of $1.44 per share, the stock commands a price-to-earnings ratio of 322 at the time of this writing.
This positions Tesla as nearly 10 times pricier than the Nasdaq-100 technology index, which carries a P/E of 33. Among U.S. companies in the elite $1 trillion market cap group, Tesla stands out as the costliest by a wide margin.
Considering its lofty valuation, constructing a compelling case for acquiring Tesla stock before January 2 proves challenging. Even if deliveries surpass expectations dramatically, it would hardly validate the elevated P/E multiple. Remarkably, the shares would need to shed 78% of their value merely to align with the P/E of Broadcom, the second-priciest member of the trillion-dollar cohort.
Why are investors paying a hefty premium for Tesla stock?
Tesla’s Cybercab autonomous robotaxi is anticipated to commence volume production in 2026. Powered by the company’s full self-driving software, it promises round-the-clock passenger transport, potentially unlocking a highly profitable income source. Investment houses like Ark Investment Management foresee this evolving into Tesla’s primary revenue generator down the line.
That said, Tesla’s full self-driving technology lacks approval for unsupervised operation anywhere in the United States currently, though California authorization appears imminent. This delay positions Tesla’s robotaxi initiative behind rivals. Alphabet’s Waymo, by contrast, already executes over 450,000 paid driverless trips weekly in five American cities.
Additionally, the Optimus humanoid robot holds immense promise, with CEO Elon Musk forecasting it could yield $10 trillion in long-term revenue for Tesla. He envisions humanoid robots surpassing human numbers by 2040, serving roles in both commercial and residential settings.
Yet Optimus trails even further in readiness for market entry compared to Cybercab. Musk anticipates the newest iteration, Optimus 3, might not achieve mass production until late 2026, followed by rapid scaling to 1 million units per year.
While these innovative ventures offer Tesla tremendous growth prospects, they remain irrelevant to the imminent January 2 EV delivery update. Given their distance from generating substantial income—spanning several years—I foresee a potential sharp pullback in Tesla’s stock price in the interim.
