Tesla delivered 418,227 vehicles in Q4 2025, missing analyst consensus by 4,623 units. The 1.1% shortfall wouldn't normally matter except for what it represents: the company's second consecutive year of declining deliveries. Full-year 2025 saw 1.64 million vehicles delivered, down 8.6% from 2024's 1.79 million. This isn't a rounding error or temporary slowdown. This is a growth company that stopped growing, now trading at a valuation that assumes it never will.

The stock fell 2.59% to $438 on the news, a muted reaction considering Tesla's market capitalization sits at $1.41 trillion—pricing the company at 196 times trailing earnings while deliveries actively decline. BYD delivered 2.26 million electric vehicles in 2025, up 28% year-over-year, officially overtaking Tesla as the global EV leader. The narrative that carried Tesla's stock from $200 to nearly $500 over three months just collided with reality.

The Geographic Collapse Nobody Wants to Discuss

The delivery miss obscures deeper structural problems visible in regional data. European registrations fell 39% year-over-year through November while BYD's surged 240%. The United States, Tesla's home market, declined an estimated 33%. China, where Tesla positioned itself as the premium foreign EV brand, dropped roughly 10%. Only emerging markets—Thailand, Vietnam, Brazil—showed growth at 60% year-over-year, but from such small bases that the gains barely offset losses elsewhere.

The production-to-delivery gap tells its own story. Tesla produced 434,358 vehicles in Q4 but delivered only 418,227, leaving 16,131 units sitting in inventory. That's a 3.7% gap suggesting either weakening demand or deliberate positioning for Q1, though neither interpretation is particularly bullish. The company has spent the past year cutting prices repeatedly to stimulate sales, and those cuts have compressed automotive gross margins below 17% while failing to restart growth.

When Premium Multiples Meet Commodity Dynamics

Here's the uncomfortable math: Tesla trades at 196 times trailing earnings based on fiscal 2024 EPS of roughly $2.23. The enterprise value sits at 13.2 times sales and 87.6 times EBITDA—multiples that imply sustained 30% annual growth, autonomous driving breakthroughs within 2-3 years, and margin expansion to Apple-like levels around 25%. Instead, the company just reported its second year of delivery declines, operates with 6% operating margins, and continues pushing the autonomous vehicle timeline into the indefinite future.

The energy storage business provided the only genuine bright spot, deploying a record 14.2 GWh in Q4 and beating consensus by 6%. Full-year deployments reached 46.7 GWh, up 22.9% year-over-year, with analysts projecting continued 35%+ growth through 2027. This represents Tesla's diversification path beyond automotive, but at current revenue mix it can't offset the core business deterioration fast enough to justify the valuation.

The January 28 earnings call will force management to answer questions they've successfully deflected for quarters: What explains accelerating delivery declines? When does the next-generation platform launch? What's the realistic timeline for robotaxi regulatory approval? How do you compete with BYD when they're growing 28% while you're shrinking 8.6%? The market has given Tesla extraordinary patience, valuing it as a technology company while it operates with automotive economics. That patience appears to be running out, measured in the gap between a $498 peak three weeks ago and the grinding decline toward support levels that could reset expectations entirely.