Tesla Faces Diverging Delivery Growth Forecasts Amid Policy Uncertainty

Tesla Inc. (TSLA) is currently confronting a range of predictions regarding its growth in vehicle deliveries for 2025, with major discrepancies between Wall Street expectations and those of independent analysts. This situation is complicated by the unpredictability surrounding new vehicle launches and potential changes in government policies.

Key Developments: On a recent Sunday, Gary Black, Managing Partner of The Future Fund LLC, pointed out that while Wall Street's estimated deliveries for Tesla in fiscal 2025 stand at 2.07 million units, reflecting a 16% increase from the previous year, notable Tesla analyst Troy Teslike predicts a 1% decline in deliveries for that period.

This analysis diverges significantly from CEO Elon Musk's forecast, which suggested a growth rate between 20% and 30% during the third-quarter earnings call.

Black underlined that Tesla's performance in 2025 will largely depend on three crucial elements: the launch success of the refreshed Model Y Juniper, the demand for a new affordable vehicle priced between $30,000 and $35,000 expected to debut in the first half of 2024, and advancements in the company’s Full Self-Driving technology.

Concerns are rising that Wall Street may revise its delivery forecast of 2.07 million units (an anticipated 16% year-on-year growth) downward, along with earnings projections of $3.24 per share (a 34% year-on-year increase). Black suggests such adjustments could lead to a decline of Tesla's stock price to about $350-$375, representing a drop of roughly 13%. This potential decline could happen despite management's optimistic outlook on autonomous driving capabilities.

Impact of Policy Changes: An additional complication for Tesla is the potential termination of the $7,500 federal EV tax credit under a possible future administration led by Donald Trump. Black believes that eliminating this credit would significantly impact Tesla, as U.S. sales account for 30-35% of the company’s global volume, contrasting sharply with the mere 4-5% seen in traditional automakers’ EV sales.

Analyst Dan Ives from Wedbush Securities remains positive, recently raising Tesla’s price target to $550 due to increasing confidence in demand and the company's autonomous driving prospects. However, it is noteworthy that both Tesla's earnings projections for 2025 and 2026 have seen declines of 39% and 45%, respectively, over the past year.

The upcoming earnings call for Tesla is anticipated to be crucial, especially as Wall Street will be closely monitoring the fourth-quarter automotive gross margins, expected to be around 16.2%, excluding regulatory credits. The prior quarter had reported better-than-expected margins of 17.1%, although CFO Vaibhav Taneja cautioned about ongoing sustainability challenges due to the current economic situation.

Market Performance: As of the latest trading day, Tesla's stock closed at $406.58, reflecting a decrease of 1.41%. Following regular trading hours, the stock fell further by 0.27%. Over the past year, Tesla's stock has witnessed a remarkable increase of 121.87%, according to market analysts.

Tesla, Forecasts, Stock