Tesla reversed its sales slowdown, but not enough to calm investors' nerves

• Tesla reported third-quarter sales on Wednesday.
• Shares fell in early trading following the release.

Tesla reported third-quarter sales of 462,890 on Wednesday morning, its first quarter-over-quarter gains this year.

Shares fell about 4% in early trading following the release. The stock has been on a wild ride this year, surging roughly 81% from an April low as CEO Elon Musk hypes an autonomous Tesla taxi to be revealed on October 10.

Analysts had expected 462,000 vehicle deliveries for the period ending September 30.

As is tradition at Musk's car company, the end of the quarter came with an all-hands-on-deck push to get cars delivered to waiting customers, which included aggressive financing incentives in September. The effort seemed to pay off, delivering Tesla's first sales increase of 2024.

Still, Tesla will have to make monumental increases in the final three months of the year to put 2024's figures ahead of the previous year,

Reversing the sales slowdown at Tesla is a much-needed win for Musk's car company.

Across the industry, automakers are struggling with a slowdown in demand for electric cars. Tesla stayed above the fray last year as legacy car companies scrambled to change their EV plans, but this year has been a different story.

Tesla posted two consecutive quarters of falling deliveries in the first half of the year, reversing years of growth for the company. Musk's initial plan to undercut competitors on price isn't working as well as it did a year ago and is also eating into the company's bottom line.

And as new vehicle sales fall regardless of powertrain, Musk has touted autonomy as the latest driver of Tesla's growth story and one that investors should pay more attention to than sales.

Analyst Dan Ives of Wedbush, a longtime Tesla bull, said the numbers were "a step in the right direction but clearly we and the Street were hoping for 3k-5k upside to this number and we will see some pressure on shares this morning as investors walk away from delivery numbers expecting more."

"Overall, this is a clear improvement from 1H and we believe getting in the range of 1.8 million for the year is still the key and important bogey," he told clients.