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Wednesday, April 2 is President Donald Trump’s “Liberation Day,” when he will unleash a plethora of “reciprocal” tariffs on trading partners worldwide. It is also the day when Elon Musk’s global electric vehicle (EV) company Tesla (TSLA) published its Q1 deliveries details. Expectations were somber for the EV leader amid heightened competition and Musk’s political standing.
Well, the numbers came in even below Street expectations as Tesla reported just 336,681 deliveries in Q1 2025, a drop of 13% from the prior year. Production also witnessed a slide to 362,615 vehicles from 433,371 vehicles in the year-ago period.
The persistently dwindling sales over the last several quarters have had an impact on the share price as well.
Once a member of the coveted trillion-dollar market cap club, Tesla stock is down 30% on a year-to-date basis, taking its market cap down to $863.5 billion.
However, for long-term investors, the time may be ripe to load up on the company’s shares. Why? Let’s have a closer look.
Stable Financials
Tesla reported growth in its latest quarter, despite missing revenue and earnings projections. The company’s revenue increased 2% year-over-year to $25.71 billion, while earnings per share rose 3% to $0.73, falling just short of the $0.75 consensus estimate.
While the decline in vehicle deliveries was viewed as a challenge in the quarter, other key operational metrics demonstrated strong momentum. The company expanded its charging infrastructure significantly, with the number of charging stations increasing 17% year-over-year to 6,975, while the total number of connectors grew by 19% to 65,495.
Tesla’s operational cash flow remained solid, reaching $4.8 billion, up from $4.4 billion in the previous year, although free cash flow saw a slight decline to $2.03 billion. Overall, Tesla brought in nearly $15 billion in operating cash flow last year.
By the end of the reporting period, the company maintained a strong liquidity position, holding $36.6 billion in cash—well in excess of its short-term debt obligations of $14.9 billion.
Exciting Future
By being one of the most influential companies on the market, Tesla’s current predicament has not deterred its backers. Commerce Secretary Howard Lutnick spoke like a Wall Street analyst when he said in a recent interview that “If you want to learn something on this show tonight, buy Tesla. It’s unbelievable that this guy’s stock is this cheap. It will never be this cheap again when people understand the things he is building.” Billionaire mutual fund investor Ron Baron sees Tesla’s valuation multiplying from its current level near $1 trillion to hit $5 trillion over the next decade.
Tesla is set to take a major step forward in autonomous mobility with the upcoming launch of its Cybercab and Robotaxi service in June. Having surpassed 3 billion miles in autonomous driving, the company is reinforcing its leadership in self-driving technology, positioning itself at the forefront of commercializing autonomous ride-hailing solutions.
Yet, Tesla’s scope extends well beyond automobiles. The company’s range of cutting-edge innovations suggests that present challenges could eventually be seen as minor setbacks rather than long-term obstacles.
Take Optimus, Tesla’s humanoid robot, which Elon Musk envisions as a transformative product with the potential to generate over $10 trillion in revenue. As previously discussed in my earlier analysis, Musk anticipates that once production scales to a million units annually, the cost per unit could drop below $20,000, unlocking a massive market opportunity.
Another key development is the Dojo Supercomputer. As covered in my previous piece, Dojo Supercomputer is an advanced AI system designed to process vast amounts of video data for autonomous driving. Morgan Stanley analysts have estimated that Dojo alone could add as much as $500 billion in enterprise value, reflecting its long-term strategic importance.
Beyond AI and robotics, Tesla continues to expand its footprint in the energy sector. In Q4 2024, the company achieved a milestone by deploying 11.0 GWh of energy storage products. This, along with ongoing advancements in battery technology and charging infrastructure, underscores Tesla’s broader ambitions in energy storage, reinforcing its role as a major player in the renewable energy industry.
Analyst Opinions on TSLA Stock
Taking all of this into account, analysts have assigned Tesla stock a consensus rating of “Hold,” with an average target price of $331.47, suggesting potential upside of approximately 17% from its current valuation. Among the 41 analysts covering the stock, 16 have issued a “Strong Buy” recommendation, three rate it as a “Moderate Buy,” 12 maintain a “Hold” stance, while 10 have given it a “Strong Sell” rating.
