Tesla’s car business keeps shrinking as Wall Street expects another year-over-year sales drop

Tesla (NASDAQ: TSLA) is heading toward another year-over-year sales decline as its main car business keeps losing ground.

The stock has also taken a beating in 2026. Shares are down 21% this year, while the S&P 500 (SPX) has gained 12%. Tesla is also trading almost 30% below its December record high, even as Wall Street has become less willing to tell investors to sell the stock.

Only 13.1% of 61 analyst recommendations on Tesla now carry a sell-equivalent rating, according to Bloomberg data. That is the smallest bearish share since April 2023.

Back then, Tesla was dealing with growing pressure on profit margins, and 12.8% of analysts recommended selling the stock. Last December, when Tesla reached its record price, almost one-quarter of analysts were bearish.

Wall Street cuts bearish Tesla calls as Elon Musk moves deeper into AI

However, a decrease in sell recommendations has occurred as CEO Elon Musk drives Tesla into more than just electric vehicles. Elon Musk is attempting to make Tesla about physical artificial intelligence, putting focus on self-driving robotaxis and humanoid robots rather than the sales of automobiles.

Tesla’s newest loss of a sell rating did not come from an analyst changing direction. Colin Langan, a longtime Tesla skeptic, left Wells Fargo (NYSE: WFC). Colin’s departure led Wells Fargo to suspend research coverage of Tesla and 17 other auto companies. That removed one bearish recommendation from the total without an upgrade taking place.

On the other hand, the proportion of hold-rated stocks that analysts recommend is at its highest level in over two years.

In other words, despite being very underperforming relative to the market this year, analysts are becoming increasingly conservative with respect to bearish views on Tesla.

Tesla also continues to carry far more negative analyst ratings than most of the other giant technology stocks grouped inside the Magnificent Seven. Fewer than 2% of analysts covering five of those companies currently have bearish ratings.

Apple (NASDAQ: AAPL) has a much higher negative share at 10.7%, though that still sits below Tesla’s 13.1%.

Tesla’s stock weakness has arrived at the same time as Elon tries to change what investors are buying into. The company still sells electric vehicles, but more of its long-term strategy is now tied to autonomous driving systems, robotaxis, robotics and AI hardware.

European Tesla registrations jump as several markets reverse earlier sales declines

Tesla’s European numbers improved sharply in September. New registrations, which are widely used as a measure of vehicle sales, rose across several major markets compared with the same month last year.

Portugal recorded the biggest jump, with Tesla registrations rising 128.3% year over year, according to data from ACAP. France followed with a 61.9% increase, based on figures from French automotive body PFA.

Sweden reported a 38.4% rise, according to Mobility Sweden, while Spanish industry group ANFAC showed registrations climbing 24.8% in Spain.

Growth was much smaller in northern Europe. Tesla registrations increased 2.2% in Norway, according to vehicle data compiler OFV. Denmark recorded a 2.9% gain.

Several factors have supported the rebound. Tesla is now being measured against weaker sales numbers from a year earlier, making annual comparisons easier. Higher fuel prices have also changed the cost equation for some drivers.

Government incentives continue to support electric vehicle purchases in parts of Europe, while consumer interest in battery-powered cars has also increased.

The September gains extend a wider European recovery after Tesla spent two years dealing with falling regional sales.

Data from the European Automobile Manufacturers’ Association showed Tesla registrations across the European Union, Britain and the European Free Trade Association jumping 43.3% between January and August.

That growth rate was higher than the wider battery-electric vehicle market, which expanded 38.8% over the same eight-month period.