Investor's Corner
Tesla 2024: What analysts are saying about outlook for the New Year
Tesla closed out 2023 with a bang, reporting record deliveries for a calendar year and eclipsing the 1.8 million unit production goal that was set at the beginning of the year.
Now, 2024 is here, and analysts are putting into scope what could come from Tesla this year. There are a lot of rumors of what the automaker could bring to the table this year, including its rumored $25,000 vehicle, revamps of the Model 3 coming to the United States, and a new version of the Model Y hitting the scene. Tesla will also look to ramp up production of the Cybertruck this year.
Tesla Model 3 Highland delivery from Fremont expected by the end of Q1 2024
Analysts are split on what they expect from Tesla in 2024, while the bulls are being bulls and the bears are being bears. What else should we expect, right?
But for what it is worth, in order to get a well-rounded perspective of what might be on the way, we are looking at both sides of the argument, highlighting what Tesla’s supporting analysts are expecting from the company in 2024. Inversely, we will also look at the more pessimistic analysts, and why they feel 2024 could be the most challenging year for Tesla yet.
Bullish Sentiments
Morgan Stanley’s Adam Jonas is one of the bulls in the Tesla story, and he projects roughly 2.25 million vehicle deliveries this year.
Additionally, Jonas feels that the true indication of Tesla’s dominance will be felt outside of China, where it has struggled to keep up with domestic automakers. Instead, the focus is in the United States and Europe:
“Outside of China, we struggle to see anyone who can compete with Tesla at this stage. We don’t think it’s a coincidence at all that Tesla’s ‘stepped up’ engagement with foreign countries comes at a time when China has surpassed Japan as the largest exporter of passenger cars.”
Jonas maintained a $380 price target on the stock.
Meanwhile, Jefferies reiterated a ‘Hold’ rating on the stock but raised its 12-month price target to $255 from $210 after reporting its 2023 volume.
A note from analysts at the firm stated that, although there were no significant changes in volume, there was a decrease in leasing adoption and above-expected delivery numbers for “Other Models,” meaning Model S, Model X, and Cybertruck. These could indicate an easier 4680 battery production ramp, or, perhaps, a better-than-expected Cybertruck ramp-up as the early months of the project continue on.
Analysts from Jefferies wrote (via Investing):
“High deliveries of Cybertrucks in Q4 may not help 2023 profitability and we continue to see the vehicle as Off-Mission. Still, it would suggest an earlier or smoother ramp manufacturing 4680 cells or trucks than feared.”
Bearish Narratives
The Bear argument is one that many firms continue to maintain, and Deutsche Bank is one, especially as the firm sees a “large downside risk” on Tesla stock moving forward.
Analysts from the firm see guidance of 2.1 million units being realistic, as well as a veer-away from the 50 percent CAGR over the mid-term.
The risk comes from reduced volume forecast due to market assumptions, pricing pressures, the Cybertruck’s potential impact on Tesla’s strong margins, and an elevated tax rate in China.
Additionally, Toni Sacconaghi believes the auotmaker could fall 40 percent this year, especially as margin pressure comes to the forefront. He also believes Tesla will “disappoint on volumes.”
Sacconaghi said in December Tesla was the best stock to short heading into the New Year, and while he reiterated his $150 price target on the stock, the analyst seems to share the same sentiments as Deutsche Bank. Margins are the focus for bears in 2024, and Tesla has some of the best in the automotive industry for years.
Tesla shares were down roughly 3.75 percent at the time of publish, trading around $239 a share.
Disclosure: I own Tesla shares.
I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.
Tesla stock (NASDAQ: TSLA) closed at an all-time high on Tuesday, jumping over 3 percent during the day and finishing at $489.88.
The price beats the previous record close, which was $479.86.
Shares have had a crazy year, dipping more than 40 percent from the start of the year. The stock then started to recover once again around late April, when its price started to climb back up from the low $200 level.
This week, Tesla started to climb toward its highest levels ever, as it was revealed on Sunday that the company was testing driverless Robotaxis in Austin. The spike in value pushed the company’s valuation to $1.63 trillion.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
It is the seventh-most valuable company on the market currently, trailing Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, and Meta.
Shares closed up $14.57 today, up over 3 percent.
The stock has gone through a lot this year, as previously mentioned. Shares tumbled in Q1 due to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE), which pulled his attention away from his companies and left a major overhang on their valuations.
However, things started to rebound halfway through the year, and as the government started to phase out the $7,500 tax credit, demand spiked as consumers tried to take advantage of it.
Q3 deliveries were the highest in company history, and Tesla responded to the loss of the tax credit with the launch of the Model 3 and Model Y Standard.
Additionally, analysts have announced high expectations this week for the company on Wall Street as Robotaxi continues to be the focus. With autonomy within Tesla’s sights, things are moving in the direction of Robotaxi being a major catalyst for growth on the Street in the coming year.
Elon Musk
Tesla needs to come through on this one Robotaxi metric, analyst says
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Tesla needs to come through on this one Robotaxi metric, Mark Delaney of Goldman Sachs says.
Tesla is in the process of rolling out its Robotaxi platform to areas outside of Austin and the California Bay Area. It has plans to launch in five additional cities, including Houston, Dallas, Miami, Las Vegas, and Phoenix.
However, the company’s expansion is not what the focus needs to be, according to Delaney. It’s the speed of deployment.
The analyst said:
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Profitability will come as the Robotaxi fleet expands. Making that money will be dependent on when Tesla can initiate rides in more areas, giving more customers access to the program.
There are some additional things that the company needs to make happen ahead of the major Robotaxi expansion, one of those things is launching driverless rides in Austin, the first city in which it launched the program.
This week, Tesla started testing driverless Robotaxi rides in Austin, as two different Model Y units were spotted with no occupants, a huge step in the company’s plans for the ride-sharing platform.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
CEO Elon Musk has been hoping to remove Safety Monitors from Robotaxis in Austin for several months, first mentioning the plan to have them out by the end of 2025 in September. He confirmed on Sunday that Tesla had officially removed vehicle occupants and started testing truly unsupervised rides.
Although Safety Monitors in Austin have been sitting in the passenger’s seat, they have still had the ability to override things in case of an emergency. After all, the ultimate goal was safety and avoiding any accidents or injuries.
Goldman Sachs reiterated its ‘Neutral’ rating and its $400 price target. Delaney said, “Tesla is making progress with its autonomous technology,” and recent developments make it evident that this is true.
Investor's Corner
Tesla gets bold Robotaxi prediction from Wall Street firm
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Tesla (NASDAQ: TSLA) received a bold Robotaxi prediction from Morgan Stanley, which anticipates a dramatic increase in the size of the company’s autonomous ride-hailing suite in the coming years.
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Percoco dug into the Robotaxi fleet and its expansion in the coming years in his latest note, released on Tuesday. The firm expects Tesla to increase the Robotaxi fleet size to 1,000 vehicles in 2026. However, that’s small-scale compared to what they expect from Tesla in a decade.
Tesla expands Robotaxi app access once again, this time on a global scale
By 2035, Morgan Stanley believes there will be one million Robotaxis on the road across multiple cities, a major jump and a considerable fleet size. We assume this means the fleet of vehicles Tesla will operate internally, and not including passenger-owned vehicles that could be added through software updates.
He also listed three specific catalysts that investors should pay attention to, as these will represent the company being on track to achieve its Robotaxi dreams:
- Opening Robotaxi to the public without a Safety Monitor. Timing is unclear, but it appears that Tesla is getting closer by the day.
- Improvement in safety metrics without the Safety Monitor. Tesla’s ability to improve its safety metrics as it scales miles driven without the Safety Monitor is imperative as it looks to scale in new states and cities in 2026.
- Cybercab start of production, targeted for April 2026. Tesla’s Cybercab is a purpose-built vehicle (no steering wheel or pedals, only two seats) that is expected to be produced through its state-of-the-art unboxed manufacturing process, offering further cost reductions and thus accelerating adoption over time.
Robotaxi stands to be one of Tesla’s most significant revenue contributors, especially as the company plans to continue expanding its ride-hailing service across the world in the coming years.
Its current deployment strategy is controlled and conservative to avoid any drastic and potentially program-ruining incidents.
So far, the program, which is active in Austin and the California Bay Area, has been widely successful.
Delaware Supreme Court reinstates Elon Musk’s 2018 Tesla CEO pay package
Tesla Cybercab tests are going on overdrive with production-ready units
