Analysts at Wolfe Research highlighted the critical factors influencing Tesla’s stock in a note released on Monday, acknowledging both improved outlook and lingering uncertainty.
Among these factors, new vehicle deliveries stand out, with Wolfe Research projecting 2024 deliveries to slightly decrease compared to 2023, estimating around 1.75 million units or a -2% year-over-year change. The firm pointed out that the first-quarter delivery rate, when extrapolated for the year, suggests a run-rate of 1.55 million units, which could be bolstered by seasonal boosts of approximately 65,000 units, particularly in China and North America.
Additionally, cost reductions were noted as instrumental in Tesla’s performance, with the firm praising the company’s effective cost management during the initial quarter.
Wolfe Research anticipates a gradual increase in Cybertruck production, forecasting 55,000 units in 2024 and 125,000 in 2025. The firm emphasized that while pricing may stay elevated, Cybertruck profitability might not materialize until later this year when production reaches a steady rate of approximately 125,000 units. Long-term profitability for the Cybertruck is expected to be lower than Tesla’s other products due to its larger battery pack and more complex manufacturing process.
Operating expenses are projected to remain stable in 2024 compared to the previous year, around $7.8 billion, with announced workforce reductions offsetting investments in AI-related operations.
The analysts noted an overall improvement in Tesla’s outlook compared to recent weeks but cautioned that uncertainty persists, particularly in areas like rising take rates, expansion of Full Self-Driving (FSD) into new markets (Europe and China), and the initial rollout of robotaxi services, which are viewed as crucial milestones for the company.