Tesla (NASDAQ: TSLA) reported its earnings for the first quarter of 2023 last night, and analysts kept a close eye on margins as price cuts continued to plant seeds of uncertainty in their minds.
Analysts were fixated on the 20-plus-percent margin level and whether Tesla’s strategy of cutting prices to undercut competitors and make its vehicles more affordable would hurt the company’s balance sheet.
Tesla (TSLA) Q1 2023 earnings results: $23.3B in revenue, 19.3% non-GAAP gross margins
While automotive gross margin came in at 19.3 percent, with Wall Street expecting 20.7 percent, analysts like Dan Ives of Wedbush highlighted that the price cuts were used to “further stimulate consumer demand in a shaky macro amidst rising EV competition globally in this EV arms race.”
Tesla called its drop in operating margins “manageable” as it expects to rebound through improved production efficiency at its newest factories, as well as lower logistics costs and scaling. Its factories in Texas and Berlin have ramped up production rates on several occasions thus far in 2023 already, and as manufacturing continues to grow at those factories, Tesla will also increase its annualized build rates with a new plant in Mexico.
Wedbush is still bullish on Tesla long-term, and its “near-term margin pain for long-term demand/volume gain” is something Wall Street firms are aligned with as well. However, Ives writes that Tesla dipping below the 20 percent margin “is a concern,” although he also notes that between 16 and 18 percent was where bearish estimates left the company.
As Tesla mentioned in its Q1 shareholder deck, the drop is something it anticipated and is “manageable.” Wedbush’s note states that Tesla is comfortable with a sub-20 percent rating because it is confident it will rebound through the next few years. However, it is aware of the risks that come with the price cuts:
“With no rose-colored glasses: margins are now a delicate issue that are keeping Tesla investors up at night.”
Tesla is also aware of the risks as companies attempt to operate at lower margins, noting during the call that new automakers fail because their ability to operate falters at lower margins. Musk said via (Seeking Alpha):
“Actually, this one — assuming I could wax on about for a while because really, people didn’t understand that the best short-selling argument against Tesla for the longest time was the fact that Tesla does not have an existing fleet and that the auto industry, the reason incumbents succeed and newcomers fail, the biggest reason is that the incumbents have a large fleet, and they’re able to sell new cars at close to zero margin and then sell spare parts at a very high margin, sort of razors and blades type thing. And so the only way to actually succeed for a newcomer to succeed is to have a product that is so compelling that people are willing to pay a premium over the incumbent product.”
Nevertheless, Tesla’s long-term story is still something Wedbush looks at from a bullish perspective. The firm will pay attention to the margin compression and price cuts moving forward as they “now emerge as a clear overhang on the stock.”
Wedbush cut its price target from $225 to $215, but maintained its ‘Outperform’ rating on the stock.
Disclosure: Joey Klender is a TSLA Shareholder.
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Investor's Corner
Tesla analysts are expecting the stock to go Plaid Mode soon

Tesla (NASDAQ: TSLA) has had a few weeks of overwhelmingly bullish events, and it is inciting several analysts to change their price targets as they expect the stock to potentially go Plaid Mode in the near future.
Over the past week, Tesla has not only posted record deliveries for a single quarter, but it has also rolled out its most robust Full Self-Driving (Supervised) update in a year. The new version is more capable than ever before.
Tesla Full Self-Driving v14.1 first impressions: Robotaxi-like features arrive
However, these are not the only things moving the company’s overall consensus on Wall Street toward a more bullish tone. There are, in fact, several things that Tesla has in the works that are inciting stronger expectations from analysts in New York.
TD Cowen
TD Cowen increased its price target for Tesla shares from $374 to $509 and gave the stock a ‘Buy’ rating, based on several factors.
Initially, Tesla’s positive deliveries report for Q3 set a bullish tone, which TD Cowen objectively evaluated and recognized as a strong sign. Additionally, the company’s firm stance on ensuring CEO Elon Musk is paid is a positive, as it keeps him with Tesla for more time.
Elon Musk: Trillionaire Tesla pay package is about influence, not wealth
Musk, who achieved each of the tranches on his last pay package, could obtain the elusive title as the world’s first-ever trillionaire, granted he helps Tesla grow considerably over the next decade.
Stifel
Stifel also increased its price target on Tesla from $440 to $483, citing the improvements Tesla made with its Full Self-Driving suite.
The rollout of FSD v14.1 has been a major step forward for the company. Although it’s in its early stages, Musk has said there will be improved versions coming within the next two weeks.
Stifel raises Tesla price target by 9.8% over FSD, Robotaxi advancements
Analysts at the firm also believe the company has a chance to push an Unsupervised version of FSD by the end of the year, but this seems like it’s out of the question currently.
It broke down the company’s FSD suite as worth $213 per share, while Robotaxi and Optimus had a $140 per share and $29 per share analysis, respectively.
Stifel sees Tesla as a major player not only in the self-driving industry but also in AI as a whole, which is something Musk has truly pushed for this year.
UBS
While many firms believe the company is on its way to doing great things and that stock prices will rise from their current level of roughly $430, other firms see it differently.
UBS said it still holds its ‘Sell’ rating on Tesla shares, but it did increase its price target from $215 to $247.
It said this week in a note to investors that it adjusted higher because of the positive deliveries and its potential value with AI and autonomy. However, it also remains cautious on the stock, especially considering the risks in Q4, as nobody truly knows how deliveries will stack up.
In the last month, Tesla shares are up 24 percent.
Investor's Corner
Stifel raises Tesla price target by 9.8% over FSD, Robotaxi advancements
Stifel also maintained a “Buy” rating for the electric vehicle maker.

Investment firm Stifel has raised its price target for Tesla (NASDAQ:TSLA) shares to $483 from $440 over increased confidence in the company’s self-driving and Robotaxi programs. The new price target suggests an 11.5% upside from Tesla’s closing price on Tuesday.
Stifel also maintained a “Buy” rating despite acknowledging that Tesla’s timeline for fully unsupervised driving may be ambitious.
Building confidence
In a note to clients, Stifel stated that it believes “Tesla is making progress with modest advancements in its Robotaxi network and FSD,” as noted in a report from Investing.com. The firm expects unsupervised FSD to become available for personal use in the U.S. by the end of 2025, with a wider ride-hailing rollout potentially covering half of the U.S. population by year-end.
Stifel also noted that Tesla’s Robotaxi fleet could expand from “tiny to gigantic” within a short time frame, possibly making a material financial impact to the company by late 2026. The firm views Tesla’s vision-based approach to autonomy as central to this long-term growth, suggesting that continued advancements could unlock new revenue streams across both consumer and mobility sectors.
Tesla’s FSD goals still ambitious
While Stifel’s tone remains optimistic, the firm’s analysts acknowledged that Tesla’s aggressive autonomy timeline may face execution challenges. The note described the 2025 unsupervised FSD target as “a stretch,” though still achievable in the medium term.
“We believe Tesla is making progress with modest advancements in its Robotaxi network and FSD. The company has high expectations for its camera-based approach including; 1) Unsupervised FSD to be available for personal use in the United States by year-end 2025, which appears to be a stretch but seems more likely in the medium term; 2) that it will ‘probably have ride hailing in probably half of the populations of the U.S. by the end of the year’,” the firm noted.
Investor's Corner
Cantor Fitzgerald reaffirms bullish view on Tesla after record Q3 deliveries
The firm reiterated its Overweight rating and $355 price target.

Cantor Fitzgerald is maintaining its bullish outlook on Tesla (NASDAQ:TSLA) following the company’s record-breaking third quarter of 2025.
The firm reiterated its Overweight rating and $355 price target, citing strong delivery results driven by a rush of consumer purchases ahead of the end of the federal tax credit on September 30.
On Tesla’s vehicle deliveries in Q3 2025
During the third quarter of 2025, Tesla delivered a total of 497,099 vehicles, significantly beating analyst expectations of 443,079 vehicles. As per Cantor Fitzgerald, this was likely affected by customers rushing at the end of Q3 to purchase an EV due to the end of the federal tax credit, as noted in an Investing.com report.
“On 10/2, TSLA pre-announced that it delivered 497,099 vehicles in 3Q25 (its highest quarterly delivery in company history), significantly above Company consensus of 443,079, and above 384,122 in 2Q25. This was due primarily to a ‘push forward effect’ from consumers who rushed to purchase or lease EVs ahead of the $7,500 EV tax credit expiring on 9/30,” the firm wrote in its note.
A bright spot in Tesla Energy
Cantor Fitzgerald also highlighted that while Tesla’s full-year production and deliveries would likely fall short of 2024’s 1.8 million total, Tesla’s energy storage business remains a bright spot in the company’s results.
“Tesla also announced that it had deployed 12.5 GWh of energy storage products in 3Q25, its highest in company history vs. our estimate/Visible Alpha consensus of 11.5/10.9 GWh (and vs. ~6.9 GWh in 3Q24). Tesla’s Energy Storage has now deployed more products YTD than all of last year, which is encouraging. We expect Energy Storage revenue to surpass $12B this year, and to account for ~15% of total revenue,” the firm stated.
Tesla’s strong Q3 results have helped lift its market capitalization to $1.47 trillion as of writing. The company also teased a new product reveal on X set for October 7, which the firm stated could serve as another near-term catalyst.
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