TLDR:
- Tesla delivered 495,570 EVs in Q4 2024, falling short of analyst estimates
- Analysts divided: Wedbush maintains $535 target while JPMorgan warns of 40% profit risk under Trump
- Tesla’s FSD showed improvement but still exhibits concerning behaviors in latest tests
- Bank of America downgraded Tesla to Neutral while raising price target to $490
- Rivian resolved copper winding supply issues and exceeded revised production forecast with 49,476 vehicles in 2024
The electric vehicle market leader Tesla faced scrutiny from Wall Street analysts following lower-than-expected fourth-quarter 2024 delivery numbers of 495,570 vehicles, prompting divergent views on the company’s future prospects.
Bank of America made headlines by downgrading Tesla to Neutral from Buy, while simultaneously raising its price target to $490 from $400. Analyst John Murphy cited high execution risks despite potential upside from core automotive business, robotaxi services, and energy storage.
Wedbush analyst Dan Ives maintained an “outperform” rating with a $535 price target, describing the quarterly delivery numbers as “respectable.” He emphasized Tesla’s potential value in AI and robotaxis, particularly under a potential Trump administration.
Taking a more bearish stance, JPMorgan’s Ryan Brinkman kept his “underweight” rating and $135 price target. He warned that Trump administration policies could lead to Tesla losing up to 40% of its profits through the elimination of key subsidies and credits.
The company could face a $3.2 billion impact from the potential loss of the Consumer Tax Credit and California Air Resources Board ZEV credits, according to JPMorgan’s analysis. This represents about 40% of Tesla’s projected $8.3 billion EBIT for 2024.
Truist Securities Analyst William Stein conducted another test of Tesla’s Full Self-Driving (FSD) system, reporting improved performance but noting persistent issues. While completing a 15-mile journey without interventions, the system showed aggressive driving behaviors and challenges with camera-only sensing.
The FSD test revealed concerns about the system’s reliance on cameras without additional sensors like LiDAR or radar. Stein observed that while the system showed improvement, it still wasn’t ready for full autonomy or robotaxi service deployment.
Meanwhile, Rivian announced the resolution of a critical supply chain issue that had previously constrained production. The company had faced challenges with copper windings for its in-house Enduro motor, leading to reduced production guidance.
Despite these setbacks, Rivian exceeded its revised forecast by producing 49,476 vehicles in 2024. The company is scheduled to report its Q4 2024 earnings on February 20.
Tesla stock traded at $394.94, showing a modest gain of 0.15% in regular trading hours, before declining 0.51% in after-hours trading. The company’s market performance reflects the mixed sentiment among analysts regarding its near-term prospects.
Trading data showed active volume at 227,349,948 shares, slightly above the average daily volume. The stock maintained a 52-week range between $53.56 and $153.13.
The varying analyst perspectives highlight uncertainties surrounding Tesla’s execution of new product launches, expansion of robotaxi testing, and navigation of regulatory frameworks under a potential new administration.
NHTSA opened a safety investigation into Tesla’s Actually Smart Summon autonomous feature, adding another layer of regulatory scrutiny to the company’s autonomous driving capabilities.
Canaccord Genuity offered a contrasting view by raising its price target from $298 to $404, demonstrating the wide range of analyst expectations for Tesla’s future performance.
Bank of America projects Tesla could capture 5% of the global auto market in the long term, potentially establishing itself among the top 10 automakers worldwide.
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