The future of Tesla’s stock is uncertain, with diverging forecasts for its 2025 delivery growth. Wall Street’s expectations are clashing with independent analysts’ predictions, amid uncertainty over new vehicle launches and potential policy changes.
What’s Happening
The Managing Partner of The Future Fund LLC, Gary Black, has highlighted that Wall Street projects Tesla’s fiscal 2025 deliveries at 2.07 million units, representing 16% year-over-year growth. However, respected Tesla forecaster Troy Teslike anticipates a 1% decline. This contrasts with CEO Elon Musk’s guidance of 20-30% growth provided during the third-quarter earnings call.
Key Factors Affecting Tesla’s Performance
Black emphasized that Tesla’s 2025 performance hinges on three key factors:
- The success of the Model Y Juniper refresh
- Demand for the upcoming $30,000-$35,000 vehicle expected to be unveiled in the first half of 2024
- Progress in Full Self-Driving technology
Potential Impact on Tesla’s Stock
Wall Street may lower its 2025 delivery forecast and earnings projection, potentially pushing Tesla’s stock down to the $350-$375 range, a decline of approximately 13%. This is irrespective of management’s statements on autonomy, according to Black.
EV Tax Credit Cuts and FSD Concerns
The potential elimination of the $7,500 federal EV tax credit under the Trump administration poses additional challenges. This would disproportionately impact Tesla, with U.S. sales representing 30-35% of its global volume, compared to just 4-5% for traditional automakers’ EV sales.
Analyst Outlook
Wedbush Securities analyst Dan Ives maintains a more optimistic outlook, recently raising Tesla’s price target to $550, citing growing confidence in demand and autonomous driving potential. However, Tesla’s fiscal 2025 and 2026 earnings estimates have declined 39% and 45% respectively over the past year.
Upcoming Earnings Call
The upcoming earnings call could be pivotal, with Wall Street closely watching fourth-quarter automotive gross margins, forecast at 16.2% excluding regulatory credits. The previous quarter saw better-than-expected margins of 17.1%, though CFO Vaibhav Taneja cautioned about sustainability challenges in the current economic environment.
Price Action
Tesla stock closed at $406.58 on Friday, down 1.41% for the day. In after-hours trading, the stock dipped further by 0.27%. Over the past year, Tesla’s stock surged 121.87%.
Conclusion
The future of Tesla’s stock is uncertain, with many factors at play. The potential elimination of the EV tax credit, FSD concerns, and diverging forecasts all contribute to the uncertainty. Investors will be closely watching the upcoming earnings call and the company’s progress in the automotive industry.