Tesla is increasingly likely to log another year-on-year fall in sales as its core car business struggles, blockchain outlet Cryptopolitan reported on Oct. 1 local time.

Tesla shares have fallen 21 percent so far in 2026, while the S&P 500 has gained 12 percent over the same period. The weak share performance coincides with slowing car sales. Tesla is also trading about 30 percent below its all-time high set last December. Still, Wall Street's focus is shifting from simple EV sales to autonomous driving, robotaxis, humanoid robots and AI hardware. Elon Musk is trying to transform Tesla into a 'physical AI'-focused company beyond an EV maker.

Even with the shift, strong sell calls from investment banks have declined. Based on Bloomberg data, 13.1 percent of recommendations among 61 analysts covering Tesla were equivalent to a sell, the lowest since April 2023. When Tesla shares hit a record high last December, about a quarter carried bearish calls.

The drop in sell calls does not mean higher expectations for results. Colin Langan, a prominent Tesla skeptic, left Wells Fargo, and Wells Fargo halted research coverage of Tesla and 17 other automakers. In the process, 1 negative recommendation dropped out of the tally, but there was no actual upgrade in investment ratings.

Hold ratings are rising in place of sells. The share of hold recommendations on Tesla has climbed to the highest level in about 2 years. The stock has continued to lag the broader market this year, but analysts have shifted toward watching rather than taking an aggressive bearish view.

Tesla still has a relatively high share of negative ratings compared with so-called Magnificent Seven large-cap tech stocks. For 5 of those names, the share of sell recommendations was under 2 percent. Apple also had a lower share of negative calls at 10.7 percent than Tesla did.

Looking only at car sales indicators, the picture varies by region. In Europe, a rebound was confirmed in September. New registrations, used as a proxy for auto sales, jumped 128.3 percent from a year earlier in Portugal. France rose 61.9 percent, Sweden 38.4 percent and Spain 24.8 percent. In Northern Europe, the gains were relatively small. Norway increased 2.2 percent and Denmark 2.9 percent.

Base effects contributed to the rebound in Europe. Tesla is being measured against weak sales a year earlier, easing the year-on-year comparison. Rising fuel prices also changed cost calculations for some drivers. Purchase incentives for EVs in some European countries and increased consumer interest in battery-based vehicles supported demand.

The September increase is not limited to a one-off move. According to data compiled by the European Automobile Manufacturers' Association, Tesla's new registrations in the European Union, Britain and the European Free Trade Association rose 43.3 percent from January to August. That was higher than the 38.8 percent growth rate for the overall battery electric vehicle market over the same period. Tesla is showing a recovery trend in Europe, but Wall Street still places more weight on the possibility that weakness in its core car business could pull down full-year results.

That leaves 2 points to watch going forward. One is whether the European sales rebound spreads to other regions. The other is how much the market accepts Tesla as an autonomous driving, robotics and AI hardware company rather than an automaker. Based on the current trend alone, forecasts of declining car sales and a shift to an AI-focused strategy remain the key variables explaining the share price.