Analysts have reduced Tesla’s 2026 delivery growth forecast from 8.2% in January to just 3.8%, with Morgan Stanley and Morningstar now projecting outright year-over-year declines. Morningstar’s Seth Goldstein estimates a near 5% drop in vehicle deliveries this year, marking a third consecutive annual decline.

Tesla plans to boost capital expenditures to over $20 billion, more than double last year’s outlay, leading Wall Street to forecast negative free cash flow after seven consecutive years of positive net inflows. The CFO has indicated the company may consider debt or alternative funding once internal resources are exhausted.

The loss of U.S. EV tax credits and intensifying competition in Europe—where Tesla’s self-driving software still lacks approval—have weighed on delivery volumes. Additionally, demand for the company’s recently launched stripped-down model variants has fallen short of analyst expectations.

With traditional vehicle sales under pressure, CEO Elon Musk faces growing expectations to deliver fully autonomous driving software, launch robotaxis and advance the Optimus humanoid robot. These initiatives remain central to sustaining Tesla’s $1.5 trillion valuation beyond the core auto business.