Tesla released its production and delivery results for the first three months of 2026 this morning, and for the first time in a long time, the news is mostly positive at first glance. The automaker produced a total of 408,386 electric vehicles, an increase of 12.6 percent compared to the first quarter of 2025.
Almost all of the vehicles produced were Models 3 and Y – the company produced 394,611 of them, representing an increase of 14.2 percent compared to the same period last year. The rest were mostly Cybertrucks, given that we learned at the end of January that the time-honored Models S and X had finally been retired. With its 14 years of service, the Model S has demonstrated a longevity surpassed only by Nissan’s R35 GT-R in the auto industry.
The problem of overproduction
Tesla also recorded an increase in sales in the first quarter, although not to the same extent. A total of 358,023 electric vehicles were sold, which is a growth of 6.3 percent compared to the same quarter of 2025. Unfortunately for Tesla, that growth is half the growth in production, which has created the largest inventory of unsold vehicles in the company’s history. The difference between manufactured and sold vehicles amounts to 50,363 cars.
If we look at just the Models 3 and Y, we see the same trend. Tesla sold 341,893 units, which is an increase of 5.6 percent year-on-year, but at the same time almost 50,000 new vehicles remained in stock. Additional context reveals that the six percent sales growth was compared to an extremely weak first quarter of 2025, when Tesla deliberately slowed production to adapt factories for the refreshed “Juniper” Model Y. Sales of all other models, the Cybertruck, and the remaining Models S and X, fell nearly 20 percent year-over-year to 13,775 units.
Decline in the energy sector
The bad news also extends to Tesla’s business with energy storage systems. Although this segment has grown steadily in recent years and brought significant income, a sharp decline was recorded in the first quarter. According to the official report, Tesla managed to install only 8.8 GWh of energy storage capacity, which is a drop of 15 percent compared to the same period last year and even 38 percent less compared to the record previous quarter.
Both car deliveries and energy system installations were below analysts’ expectations, which immediately caused a market reaction. Tesla (TSLA) stock fell by about 5.5 percent immediately after the results were announced. The company seems to be entering a transition period, and Elon Musk himself is increasingly signaling that the future value of Tesla will be based less on car sales and more on artificial intelligence and robotics, primarily on the humanoid robot Optimus.