Tesla (TSLA) Stock: Wild Ride Continues as Analysts Project $200-$800 Range
TLDR
Tesla shares dipped 0.9% in premarket trading despite gains of 7.6% on Wednesday following President Trump’s Tesla purchase announcement
Wall Street projects Q1 deliveries around 360,000 vehicles, substantially below original estimates of 430,000
January US registrations fell 11% year-over-year, with Model Y dropping 26% while Model 3 increased 19%
Tesla’s US EV market share slid to 42.5%, down 12 percentage points from the previous year
Analysts disagree whether production changes or Elon Musk’s political activities are primarily responsible for declining sales
Tesla investors are experiencing a wild ride this month as the electric vehicle maker’s stock continues to swing dramatically. Shares slipped 0.9% in Thursday’s premarket trading after two days of recovery.
The company’s stock had bounced back with a 7.6% gain on Wednesday and a 3.8% rise on Tuesday. These increases followed a dramatic 15.4% plunge on Monday, Tesla’s worst single-day performance in nearly five years.
President Donald Trump helped spark the midweek rally. During a White House event with Tesla CEO Elon Musk, Trump announced plans to purchase a Model S sedan.
Despite this presidential endorsement, Tesla stock remains nearly 50% below its December 2024 peak. The current premarket price hovers around $245.75.
Delivery projections for the first quarter have become a major concern. Wall Street initially expected Tesla to deliver about 430,000 vehicles in Q1 2025, according to FactSet data.
Recent estimates have fallen significantly. Analysts now project closer to 360,000 deliveries, which would represent a decline from the 387,000 vehicles Tesla delivered in Q1 2024.
The cause of Tesla’s sales slowdown has split the analyst community. Bulls point to production adjustments, particularly the Model Y update currently in progress.
Evidence from China supports this theory. Citi analyst Jeff Chung reports Tesla sold just 8,000 Model Y vehicles in China during February. This marks a sharp decline from the 2024 monthly average of 46,000 units.
Bears argue a different cause. They suggest Elon Musk’s increasing political profile is turning away potential customers worldwide.
Registration data reveals concerning trends in Tesla’s home market. According to S&P Global Mobility, US registrations for Tesla vehicles fell to 43,411 in January, an 11% year-over-year decline.
While Tesla maintained its leading position among US electric vehicle makers with 42.5% market share, this represents a substantial drop. The company’s market share fell 12 percentage points compared to January 2024.
The broader EV market showed growth during this period. Total US electric vehicle registrations increased 14% to 102,188 units in January.
Other manufacturers capitalized on this growth. Ford saw EV registrations climb 14% to 8,366 units, while Chevrolet posted a 36% increase to 5,935 vehicles.
Individual Tesla models showed mixed performance. The Model Y, Tesla’s bestselling vehicle, saw registrations drop 26% year-over-year to 23,898 units in January.
The Model 3 sedan performed better, with registrations increasing 19% to 14,004 units. This growth followed the rollout of the updated Model 3 early last year.
Tesla’s premium offerings faced steeper declines. Model X registrations plummeted 45% while Model S fell 38% compared to January 2024.
The Cybertruck recorded 2,807 registrations in January. This figure falls slightly below its monthly average of approximately 3,300 units.
International markets show even more dramatic sales declines. Tesla registrations dropped 45% in Europe during January and fell 49% in China in February.
Analysts
Evercore recently reduced its 2025 delivery forecast for Tesla to 1.75 million units, down from 1.875 million. The bank expressed concern that deliveries could fall below 1.7 million amid what it termed brand and volume “destruction.”
UBS similarly cut its Tesla delivery projection to 1.7 million vehicles for 2025. Both firms cited concerns about Tesla’s brand perception.
Morgan Stanley analyst Adam Jonas maintains a more optimistic outlook. While acknowledging current sales challenges, Jonas rates Tesla shares as a Buy with a $430 price target.
His analysis includes wide potential outcomes. Jonas’s bear case puts Tesla at $200 per share, while his bull case projects $800.
Jonas identifies several potential catalysts that could boost Tesla stock. These include the expected launch of robotaxi testing in Austin, Texas later this year and a showcase of Tesla’s Optimus humanoid robots.
CFRA analyst Garrett Nelson also maintains a Buy rating on Tesla. He believes the company “is well positioned to weather the consumer backlash with its $36B+ of cash, industry-leading gross margins, and lesser exposure to tariffs relative to other automakers.”
The debate over Musk’s political activities continues to influence market perception. As head of the White House’s Department of Government Efficiency (DOGE), Musk has seen his public approval ratings decline.
Protests have emerged at Tesla showrooms in the US. Musk’s support for far-right parties in Germany and the UK has reportedly damaged his standing in European markets.
The production changeover for the Model Y may soon provide clarity. As the updated version reaches more customers, analysts will watch closely to see if sales rebound or continue to decline.
For investors, one thing seems certain: Tesla stock will remain highly volatile. As Jonas noted, shares could test both his $200 bear case and $800 bull case “within the next 12 months.”
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Filed under: News - @ March 13, 2025 3:29 pm