Tesla shares have been on a heater after a rough start to the year. Over the past six months, Tesla stock has jumped 72%.

The only thing hotter than Tesla’s stock in the last six months was the company’s third-quarter deliveries.

Tesla blew away expectations in the third quarter, delivering 497,099 electric vehicles, a significant increase from the 462,890 cars it delivered in the year-ago period. Analysts polled by Bloomberg on average were expecting the company to deliver fewer than 440,000. 

Tesla quarter-ending deliveries:

• Sept. 2025: 497,099
• June 2025: 384,122
• March 2025: 336,681
• Dec. 2024: 495,570
• Sept. 2024: 462,890
• June 2024: 443,956
• March 2024: 386,810
• Dec. 2024: 484,507
• Sept. 2024: 435,059
• June 2024: 466,140
• March 2024: 422,875
• Dec. 2023: 405,278
• Sept. 2023: 343,830

Car buyers were incentivized to purchase EVs this quarter as the $7,500 EV tax credit, which has been in place for 15 years, expired at the end of September.  Tesla was a major beneficiary of this movement.

But one analyst is concerned about more than just the seasonality of Tesla’s latest quarterly success.

Tesla record-breaking Q3 has hidden issues

While the top-line results of nearly 500,000 Teslas delivered in the third quarter are great for the company, there are issues lurking under the hood.

But there are two issues with those numbers, according to a recent Seeking Alpha note.

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First, Tesla’s deliveries were 10% above its production. The 447,000 vehicles it produced is down year over year. In fact, it’s “down by several percentages, indicating that the company is still fundamentally shrinking.”

The other major risk is that the “other models,” which include all the Tesla Models not named Y or X, are not seeing an uptick in sales, “indicating that the company hasn’t been able to grow at all outside of these core models.”

However, according to the note, the biggest issue for the company is Tesla’s valuation.

Tesla struggles to justify its current valuation

On the high end, Tesla bulls like Ark Invest CEO Cathie Wood believe Tesla is actually undervalued. Ark Invest has a five-year price target of $2,600 based on its opportunities with Robotaxi and autonomous driving software.

William Blair analyst Jed Dorsheimer has a more sober view of the company, giving a “market perform” rating. But even he believes Robotaxi is the key to the company’s future.

Related: Tesla shareholders share mixed reactions to latest sales pitch

“What jumps out to me is that Robotaxi is really the key here, as well as xAI,” William Blair analyst Jed Dorsheimer told CNBC recently. Robotaxi accounts for $298.61 of the firm’s $357.43 price target.

But Tesla has had trouble realizing the potential of the technology and has fallen behind its competitors.

“The company’s FSD is 7 years behind schedule from its original targets, and it’s losing to Waymo substantially,” the Seeking Alpha note said.

Tesla has tied CEO Elon Musk’s future compensation to the company’s autonomous and robotics success.

Tesla compensation performance benchmarks for CEO Elon Musk:

• 20 million Tesla vehicles delivered
• 10 million active FSD subscriptions
• 1 million Optimus robots delivered
• 1 million Robotaxis in commercial operation
• $400 billion of Adjusted EBITDA over four separate quarters

Related: Tesla stock falters, but UBS points out competitive advantages