TLDR

Table of Contents

Tesla stock up 1.5% in premarket trading after 38% YTD decline
Q1 deliveries down 13% YoY with 337,000 cars, missing analyst expectations
Analysts cite political factors, aging lineup, and competition as challenges
New affordable model in Q2 and Austin robotaxi service in June seen as key catalysts
Average analyst price target is $342, suggesting potential upside despite mixed sentiment

Tesla’s stock has seen some movement in Monday trading after a difficult start to 2025. The electric vehicle maker’s shares were up 1.5% in premarket trading to $256.09, while the broader market also showed gains.

The company has faced substantial challenges so far this year. Tesla stock has dropped 38% year-to-date and is down 41% since January’s presidential inauguration.

Volatility has increased with the stock moving an average of 4.1% daily since inauguration, compared to 2.9% in the prior year.

Tesla is set to report earnings within days, and analysts point to potential bright spots despite lowered expectations.

Recent Performance and Market Reactions

RBC analyst Tom Narayan suggests Q1 could benefit from pre-buy activity in March. Dealers may have been stocking up ahead of potential tariff hikes.

President Trump’s 25% car-import tariffs remain in place despite his recent 90-day pause on “reciprocal tariffs” announced last Wednesday.

Tesla has some natural protection from these tariffs. The company doesn’t import any vehicles it sells in the U.S., giving it an advantage over competitors who rely more heavily on imports.

The electric vehicle maker did face a sales slump in Q1. Tesla delivered about 337,000 cars, representing a 13% year-over-year decline and approximately 40,000 fewer than Wall Street expected.

This sales performance has contributed to ongoing concerns about the company’s trajectory.

Analysts See Potential Catalysts

Despite recent struggles, some analysts remain optimistic about Tesla’s prospects.

RBC’s Narayan maintains a Buy rating on the stock with a $314 price target, though he recently trimmed this figure by $6.

Benchmark analyst Mickey Legg believes “a comeback is coming” for Tesla. He states that “the recent stock pullback and sales declines, while significant, are overblown.”

Legg points to several factors that have affected Tesla in Q1, including political blowback, growing global competition, an aging vehicle lineup, and regulatory uncertainties.

However, he expects these headwinds to fade as 2025 progresses.

Coming Developments Could Drive Growth

Both analysts highlight two major upcoming events that could revitalize Tesla’s performance.

The first is a new affordable model expected to launch in Q2 2025. This could help address concerns about Tesla’s aging product lineup and potentially boost sales numbers.

The second is the launch of Tesla’s robotaxi service in Austin this June. While starting with a limited rollout, analysts will be watching closely to see how quickly it expands.

Legg also points to Tesla’s Optimus robotics project as a potential “game changer” for the long term. This could transform Tesla from primarily a car manufacturer into a “broad automation provider.”

The company’s North American production facilities in California and Texas also position it well to avoid some impact from auto tariffs.

Legg has lowered his price target from $475 to $350 but maintains a Buy rating and has added Tesla to Benchmark’s Best Ideas list.

The average analyst price target for Tesla stock currently sits at about $342 per share, according to FactSet. This represents a substantial increase from the $192 average target a year ago.

However, the average target has fallen from its peak of $381 reached in early February, before concerns grew about CEO Elon Musk’s political activities potentially hurting sales.

Overall Wall Street sentiment on Tesla remains mixed. The stock has support from 16 analysts but also faces 11 Sell and 11 Hold ratings, resulting in a Neutral consensus rating.

Despite these mixed opinions, the average price target of $305.93 suggests potential upside of 21% over the next year.

Investors will be closely watching Tesla’s upcoming earnings report for signs of whether the company can overcome its recent challenges and capitalize on its upcoming product launches.

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