Tesla’s (TSLA) Q4 2024 delivery numbers, which fell short of expectations, have placed the company under intense scrutiny. Despite delivering 495,570 vehicles, Wall Street’s reaction was mixed, and several analysts are voicing concerns over Tesla’s future profitability, especially if key government subsidies and credits are rolled back.
Analysts Revise Tesla’s Outlook
Following the disappointing Q4 performance, Bank of America downgraded Tesla’s rating from “Buy” to “Neutral,” though it raised the company’s price target from $400 to $490. The bank cited ongoing execution risks despite the rapid growth in Tesla’s core electric vehicles (EVs), robotaxi development, and energy storage ventures. Meanwhile, Wedbush’s Dan Ives maintained an “Outperform” rating with a $535 price target, noting Tesla’s potential value in AI and autonomous driving, particularly under a possible Trump administration.
On the other hand, JPMorgan’s Ryan Brinkman issued a cautionary warning, stating that Tesla could see its profits slashed by as much as 40% if critical subsidies and tax credits for EVs and autonomous technologies are eliminated. Brinkman kept an “Underweight” rating with a significantly lower price target of $135, emphasizing the risk to Tesla’s profit margins.
Self-Driving System Shows Improvement but Concerns Remain
Tesla’s Full Self-Driving (FSD) system, a key component of the company’s autonomous driving ambitions, has shown some progress in recent tests, including a successful unassisted 15-mile journey. However, analysts remain cautious about the system’s reliance on cameras alone, citing inconsistencies in its performance and aggressive driving behavior. These issues raise doubts about the FSD system’s readiness for robotaxi deployment and further expansion.
Rivian Outperforms Expectations Despite Challenges
In contrast to Tesla’s struggles, Rivian Automotive exceeded its 2024 production forecast, delivering 49,476 vehicles despite ongoing supply chain challenges, particularly with its Enduro motor. Rivian is scheduled to release its Q4 earnings report on February 20, 2025, which may provide additional insight into the company’s resilience in a competitive EV market.
As Tesla navigates these challenges, the company’s ability to adapt to policy changes and its technological progress in autonomous driving will be key factors in determining its future growth and profitability.
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