As Tesla prepares to release its fourth-quarter earnings report, several key factors are worth watching. Analyst Mark Delaney highlights the importance of the Model Y update, automotive market share, and consumer feedback in determining the company’s growth.
Tesla Model Y Update
The refreshed Model Y, which recently launched in China and is set to arrive in the US and Europe, offers several upgrades, including:
- Extended range
- Updated exterior lighting
- Added screen for the back seat
- Ambient lighting
- Better outside noise reduction
- A new camera on the front bumper to assist with parking and Autopilot
Delaney maintains a Neutral rating with a price target of $345. Tesla is offering discounts on existing Model Y units ahead of the refresh launch in March.
Market Share
Delaney estimates that Tesla’s sales in the US were flat in the fourth quarter on a year-over-year basis, with a market share of around 40-50% in the electric vehicle sector. In Europe, Tesla’s sales were down 10% year-over-year, with a market share of 13%. However, in China, Tesla’s sales were up 16% year-over-year, with a high single-digit percentage market share for battery-powered electric vehicles.
Consumer Feedback Survey
A HundredX consumer feedback survey shows a decline in Tesla’s brand trust metric, as well as a decline in net purchase intent scores. Delaney believes that new vehicles and Full Self Driving (FSD) capabilities will be key in reversing these trends.
Key Items to Watch
Ahead of Tesla’s earnings report, Delaney highlights the following key items:
- Automotive non-GAAP gross margins
- Vehicle delivery outlook for 2025
- Progress with FSD and AI-related efforts
- Growth in other segments, including Services and Energy
- Progress with Optimus and expectations on ramp timing
Delaney believes that a key debate in the market will be whether Tesla can grow more meaningfully in 2025/2026, driven by a refreshed Model Y and a new lower-cost model. Tesla is targeting 20-30% year-over-year growth in deliveries in 2025.
Additional Topics
Other topics that may be discussed in the earnings report include:
- The potential end of the $7,500 federal tax credit for electric vehicles
- Tesla’s timeline for launching the Cybercab robotaxi in 2026
- The company’s progress in achieving its goal of being safer than human drivers
Stock Performance
Tesla’s stock is currently trading at $394.62, down 3.02% on the day. The stock has a 52-week trading range of $138.80 to $488.54 and is up approximately 110% over the past year.