Tesla is on a 66% tear since Donald Trump's election win, as investors speculate that self-driving is coming soon, with the Trump administration easing the regulatory path for autonomous vehicles.
TSLA shares declined 3.3% to 417.41 during market action on Monday after sinking nearly 5% on Friday. The stock gained 2.5% last week and is up about 21% in December. Meanwhile, Tesla will report fourth-quarter and full-year deliveries and production figures, likely before the open on Thursday, Jan. 2. Analyst consensus has Tesla reporting record Q4 deliveries slightly above 500,000.
On Dec. 18, Barclays analysts wrote the post-election rally in shares of Tesla reflects a "sharp disconnect" between the stock and the company's fundamentals. The firm wrote that technicals and options are playing an outsized role in the rally and that Tesla shares are now best compared to cryptocurrencies.
Wedbush Securities analyst Dan Ives, a longtime Tesla bull, recently raises his Tesla stock price target to 515, up from 400.
"We believe the Trump White House the next 4 years will be a 'total game changer' for the autonomous and AI story for Tesla and Musk over the coming years. Our bull case is $650 for 2025," Ives wrote.
Adam Jonas, Morgan Stanley's high-profile auto analyst and a fellow TSLA bull, also hiked his Tesla stock price target to 400, up from 310, reiterating an overweight rating on the EV giant. Jonas also maintained Tesla as a "top pick."
"Elon Musk's entry into the political sphere has expanded investor thinking around Tesla's fundamental outlook – TSLA shares have since responded by rallying beyond our prior 310 price target," Jonas wrote.
With Trump winning the White House, and excitement around autonomous vehicles, the top question for investors is: when is it a good time to buy or sell Tesla stock.
Tesla Q4 Deliveries
The EV giant has said it expects "slight" vehicle deliveries growth this year, but with the end of the fourth quarter fast approaching, Tesla finds itself looking for answers with unit sales lagging in the U.S. and Europe.
The company saw vehicle deliveries rise 38% to 1.8 million in 2023 and while Tesla has said that sort of increase this year is out of reach, it is predicting growth in its automobile segment.
"Despite ongoing macroeconomic conditions, we expect to achieve slight growth in vehicle deliveries in 2024," Tesla said in its third-quarter earnings release.
Looking further out, Chief Executive Elon Musk proclaimed on the Q3 earnings call that vehicle sales could grow "20%-30%" in 2025.
With Tesla predicting slight vehicle delivery growth in 2024 vs. 2023's 1.81 million, the EV giant needs 514,925 deliveries in Q4, far more than the Q4 2023 record of 484,507. Analyst consensus currently forecasts 498,000 vehicle deliveries in Q4 and 1.79 million for 2024, according to FactSet. However, other consensus estimates have Tesla's Q4 total coming in around 506,000 units.
Goldman Sachs analyst Mark Delaney recently wrote that data out of the U.S., Europe, and China show mixed demand trends for Tesla.
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A Dec. 23 note from Barclays estimated Tesla's total Q4 deliveries at 515,000 units, the magic number which would represent year-over-year delivery growth compared to 1.8 million in 2023. The analysts wrote this will "keep stock's narrative momentum strong."
However, the firm believes investor focus on Tesla stock's fundamentals is generally limited and that a light near-term volume miss "would likely do little to dampen" TSLA's rally, fueled by President-elect Donald Trump, autonomous vehicle and artificial intelligence.
Meanwhile, Barclays also wrote that Tesla's Q4 result is likely "immaterial to the majority of the current Tesla bull case."
The Delaware Court Decision
Meanwhile, Delaware Court of Chancery Judge Kathaleen McCormick recently stuck with her January decision and once more rejected Musk's $56 billion compensation package from 2018. The pay deal is now worth more than $100 billion.
In a statement on X, Tesla said it will appeal the court's decision.
In June, some 77% of shareholders voting approved giving Musk his 2018 $56 billion pay package, or 72% excluding Musk and his brother, Kimbal Musk. Tesla shareholders also voted this year in favor of reincorporating the company in Texas, moving it from Delaware.
Before the June shareholder vote, Musk suggested he might shift Tesla resources to his privately held xAI if he didn't get the pay deal, as well as further power giving him a 25% voting stake.
Musk currently has a nearly 13% stake in Tesla. Prior to selling TSLA shares to purchase Twitter, now X, for $44 billion in late 2022, Musk owned around 22% of Tesla.
Judge Kathaleen McCormick wrote in in the opinion that, "Even if a stockholder vote could have a ratifying effect, it could not do so here."
Upgrades And Price Targets Amid Trump 'Bump'
Mizuho Securities analyst Vijay Rakesh upgraded Tesla to an outperform rating early Tuesday with a 515 price target. Rakesh cited a potential loosening of autonomous driving regulatory framework under President Donald Trump.
Bank of America analyst John Murphy has raised his Tesla stock price target to 400 from 350, and maintained a buy rating. The analyst hiked his price target after visiting Tesla's Texas gigafactory.
Tesla is well-positioned to grow in 2025 with its core EV business and launch of its robotaxi, according to Murphy. The analyst added that the Optimus humanoid robot is "real" adding that "development" is "poised to accelerate."
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Meanwhile, Ives previously wrote that Trump could "accelerate some of the FSD and autonomous initiatives for Tesla once he is in the White House."
"The autonomous fast tracking will be front and center for investors in this scenario as some of the 2026-27 goals for Tesla could be markedly accelerated to stay on track with the China timeline for autonomous currently underway," Ives said.
"We believe a Trump White House helps unlock the $1 trillion of autonomous/AI value to Tesla's stock as autonomous/FSD is likely accelerated starting in 2025 and a tailwind for Cybercab timing," he added.
FSD Version 13
Tesla influencers gushed over Full Self-Driving v13 following a limited release around Thanksgiving. But in the past few days, a wider FSD v13 rollout suggests no major step toward self-driving.
Musk has said he expects FSD to achieve true self-driving by mid-2025, though he's said similar "this year" or "next year" statements for about a decade.
Morgan Stanley's Adam Jonas in his recent note remained cautious about Tesla's autonomous driving prospects in the short term.
"While a reassessment of self-driving policies at a national level could be inevitable in our view, we believe Tesla still faces significant hurdles to overcome in terms of technology, testing and permitting required for commercialization," Jonas wrote. "However, we believe U.S. states and metro areas will continue to have the greatest say on final deployment."
The EV giant first began rolling out the latest FSD upgrade to employees and limited outside customers.
The EV giant hyped-up expectations by predicting its FSD version 13 will show a six-times improvement in terms of miles-per driver intervention. Currently, FSD v13 appears to be a limited version, but has the ability to unpark, reverse, and park. It is still listed as "supervised" FSD, according to Tesla.
Musk on the third-quarter earnings call said he expects "fully autonomous unsupervised FSD in California and Texas next year — that's with the Model 3 and Model Y." However, Musk admitted that he tends to be a "little optimistic with time frames."
Musk also conceded on the Q3 call that Tesla EVs with Hardware 3.0 might not be able to achieve true self-driving. He said if that's the case, Tesla will upgrade FSD customers with HW3.0 for free.
IRA Tax Credit
TSLA shares about 5.8% on Nov. 14 amid reports the president-elect's transition team plans to discontinue the Inflation Reduction Act, IRA, $7,500 EV consumer tax credit. The move was not a surprise to analysts and Musk has appeared to already endorse the idea of cutting the tax credit, echoing the belief that Tesla can thrive without it.
However, if the IRA tax credits are stripped away, it could hit Tesla's auto business. The EV giant has already slashed prices repeatedly over the past year to drum up consumer interest amid waning demand.
Tesla continues to ramp up incentives, especially in the U.S., as the company targets record deliveries in Q4. The EV giant recently announced a year-end discount on local Model Y sales.
"We expect Musk to have a big seat at the table as these EV discussions happen within the Trump transition team," Ives wrote at the time. "We believe any sell-off in Tesla from these reports is the wrong knee-jerk reaction and we would be buyers."
The Musk-Trump Alliance
Analysts generally see the Trump presidency as an overall negative for EVs, but a positive for Tesla. Musk fostered a good relationship with the president-elect after campaigning tirelessly for him throughout the election cycle.
Late on Nov. 12, Trump announced in a statement that Musk and Vivek Ramaswamy will lead the Department of Government Efficiency (DOGE) to "dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures and restructure Federal Agencies."
Musk, in the statement, said, "This will send shockwaves through the system."
The Department of Government Efficiency is tasked with providing "advice and guidance from outside of Government and will partner with the White House and Office of Management & Budget."
"Musk's significant influence in the Trump White House is already having a major influence and ultimately the golden path for Tesla around Cybercabs and autonomous is now within reach with an emboldened Trump/Musk strategic alliance playing out in real time and very in line with our thesis," Ives wrote on Nov. 29.
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Tesla: Third-Quarter Earnings
The EV giant's third-quarter earnings unexpectedly rose 9% in the third quarter, snapping a four-quarter string of year-over-year declines. Revenue came in slightly below forecasts. Gross margins jumped, fueled by strong Tesla Energy margins and a record-low cost of goods sold.
Regulatory credits were high at $739 million, though below Q2's $890 million. FSD revenue recognition also may have helped.
Tesla's CFO said the EV maker may not be able to sustain Q3's margins in Q4. Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025, Tesla reported.
On the Tesla earnings conference call, Musk pegs Q2 2025 as the internal target for FSD unsupervised to be safer than a human driver. Tesla said it's testing a ride-hailing services with employees, using a human safety driver.
Musk added that the upcoming "affordable" EV will cost less than $30,000, "with incentives."
Tesla Earnings Unexpectedly Rise 9% In Q3, Elon Musk Bullish
Read more on Tesla second-quarter earnings or on the company's first-quarter report.
Tesla Stock: The Robotaxi Event
Musk set sky-high expectations for the "We Robot" event. But after showing off a Cybercab and Robovan late on Oct. 10, the market seemed unimpressed with Musk as he once more claimed full autonomous driving will come "next year" but did not offer any details or updates of an "affordable" EV.
The event was high on theatrics with Musk riding the two-seat Cybercab, with butterfly doors and no steering wheel, briefly to the stage to give his remarks. Dancing Optimus robots were paraded out with the Tesla humanoids serving attendees drinks. However, the consensus among analysts was that while the event was high on pomp and circumstance, it underdelivered on details.
Musk did say he expects the Cybercab price tag will be below $30,000, with production starting "before 2027." The Tesla chief also showed off the latest Optimus robot. He expects that the cost could be $25,000-$30,000 when produced at scale.
"That's it? Disappointing lack of detail," Jonas proclaimed in his investor note following the event. Wells Fargo analysts echoed that sentiment, writing that Tesla's robotaxi event was mostly "razzle-dazzle" with "little substance."
"We were overall disappointed with the substance and detail of the presentation. As such, we anticipated TSLA to be under pressure following the event," Jonas added.
Tesla Robotaxi Event: Cybercab, Robovan Unveiled; Musk Sees Self-Driving 'Next Year'
Cathie Wood On The Robotaxi
Tesla stock sold off hard the day following the robotaxi event, sending a sell signal to investors. However, Cathie Wood and her Ark Invest ignored that and purchased nearly $3 million in TSLA shares.
Wood, who has long been super-bullish on Tesla's autonomy push and robotaxi aims, attended Tesla's robotaxi event on Thursday. On June 12, Ark Invest updated its Tesla stock price target to 2,600 by 2029, estimating that around 90% of Tesla's enterprise value and earnings will be attributed to the robotaxi business in 2029.
Wood's Ark Invest tends to purchase Tesla stock and other positions amid sell-offs or when they break below key moving averages. Without a robotaxi network and business, Ark Invest says its TSLA price target would be around $350 per share, according to the report.
"We remain confident that the service will launch within the next five years," Ark Invest said.
Tesla EVs In Regulators' Sights
The National Highway Traffic Safety Administration announced on Oct. 18 it has opened a preliminary investigation into Tesla's Full Self-Driving, or FSD, technology in more than 2 million vehicles amid reports of four collisions, including one fatal accident, that appear to involve the autonomous driving feature in reduced visibility conditions.
The regulators said the investigation will cover 2.4 million Tesla vehicles and will look at how FSD technology detects and responds to low visibility conditions.
In December 2024, Tesla performed an over-the-air software "recall" on more than 2 million vehicles after federal regulators determined Tesla's Autopilot system is prone to misuse after reviewing 1,000 accidents.
Is Tesla Stock A Buy?
TSLA stock rose 2.5% to 431.66 last week. Shares jumped initially during the week, hitting 465.33 intraday Thursday, before slashing gains. Despite the recent decline, Tesla stock is still well above its 50-day moving average. TSLA has rallied 66% tear since Trump's election win.
Tesla stock on Dec. 11 cleared the company's longtime all-time high of 414.50, which it hit on Nov. 4, 2021. The stock had previously last touched 400 in January 2022, according to MarketSurge charts.
Tesla stock has surged in recent weeks in part on hopes that self-driving is finally on the way. Tesla topped the $1 trillion mark on Nov. 8 for the first time in two years. On Nov. 6, Tesla stock gapped up above an alternate handle buy point of 273.54 but was quickly extended.
Tesla stock popped 3.2% to 369.49 on Dec. 5, clearing a recent range, which could have offered an add-on entry for existing TSLA holders.
On Dec. 18, Tesla stock retreated 8.3% to 440.13, after hitting a record high of 488.54 intraday. TSLA stock is now on the IBD Leaderboard watchlist.
Tesla stock ranks first in the 35-member IBD Auto Manufacturers industry group. The stock has a 93 Composite Rating out of a best-possible 99. Shares also have a 97 Relative Strength Rating and a 78 EPS Rating.
Almost single-handedly, Elon Musk has turned the auto industry on its head. He has essentially forced it to get aboard the electric-vehicle train. Tesla has been a monster stock over much of its history, especially during its stratospheric run from mid-2019 to late 2021.
Tesla stock jumped 5.9% to 424.77 on Dec. 11, clearing the November 2021 all-time high of 414.50. Investors could view the move out of the three-year consolidation as a buy signal, but shares are significantly extended from moving averages. TSLA stock has been consolidating since peaking at 488.54 but doesn't show a buying opportunity right now.
Please follow Kit Norton on X @KitNorton for more coverage.
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