Tesla (NASDAQ:TSLA) saw its stock fall more than 6% as it reported delivery numbers for the third quarter of 2024. These were below expectations, but I don’t think investors should worry.

As I see it, anyone owning Tesla shares right now has to think it’s a lot more than a car company. And if they’re right, weak delivery numbers do nothing to change that.

Deliveries

Tesla delivered 462,890 vehicles between July and September. That’s short of the 469,828 some analysts had been predicting. 

One reason this might be a concern is that Tesla’s been focusing on volumes over profits. To this end, the company’s been offering various incentives to maintain sales.

Given this, shareholders might have expected lower margins. But delivery numbers coming in below expectations indicates the plan hasn’t been as successful as investors might have hoped.

Ultimately though, I don’t think this is a big problem. Even the best businesses deal with challenges from time to time, but if I was a Tesla shareholder, my focus would be elsewhere.

Robotaxis

I think the viability of Tesla as an investment comes down to its driverless vehicle division. Put simply, that has to work to justify the current share price.

If it can, the company could generate enough cash to provide investors with a return on an investment at today’s prices. If not, I think the stock looks significantly overpriced.

This is the view ARK Invest has on the business as well. By 2029, Cathie Wood’s firm expects 90% of Tesla’s profits to come from its robotaxi business, with less than 10% from car sales. 

On this basis, ARK expects the stock to be worth $2,600 per share in 2029. If – for whatever reason – the robotaxi operation doesn’t come to fruition, that price target collapses to $350.

Outlook

Tesla’s expected to unveil its robotaxi in less than a week. And I think this is much more significant for shareholders than the delivery numbers for the third quarter.

The event’s been delayed from August, but I don’t expect this to happen again. Even so, I’m mindful that there’s a long way to go from unveiling the product to launching it.

The Cybertruck was unveiled in 2019, but the vehicle didn’t go on sale until late 2023. And with driverless vehicles, there are also regulatory issues that need to be solved.

This is by no means impossible – Waymo has around 700 driverless cars already in operation. But that uses a different system, so approval for Tesla is by no means a formality.

Not worried

As an electric vehicle (EV) company, Tesla has some significant advantages over its rivals. But these alone don’t look like enough to justify the current share price. 

In my view, the company’s viability as an investment comes down to its robotaxi business. And that’s where I think investors should focus their attention.

I don’t see that weak car sales in a quarter – or even a year – materially impact Tesla’s robotaxi prospects. That’s why I don’t think the market should be concerned by the latest delivery news.