After Q4 2024 delivery numbers fell short of expectations, Tesla (TSLA, Financial) is under scrutiny. However, Wall Street reacted with mixed feelings towards the EV giant after it delivered 495,570 vehicles in the fourth quarter.
Consequently, Tesla was downgraded to "Neutral" from "Buy" at Bank of America while raising its price target to $490 from $400, though, it reasoned, execution risks remain despite fast growth in core EVs, robotaxis and energy storage. Wedbush's Dan Ives remains an 'Outperform' with a $535 price target — saying Tesla holds 'key value' in AI and autonomy given a 'potential' Trump administration. However, Ryan Brinkman of JPMorgan warned Tesla could take a 40% profit hit if key subsidies and credits are repealed, keeping an "Underweight" rating and a $135 price target.
In recent tests, Tesla's Full Self-Driving (FSD) system also showed improvement, separately, but analysts said the reliance on camera alone continues to be inconsistent. However, the system performed an unassisted 15-mile journey and displayed aggressive driving behaviour, which has implications for its readiness for robotaxi deployment.
At the same time, Rivian Automotive exceeded its forecast for 2024 production despite supply chain issues with its Enduro motor. Rivian confirmed creating 49,476 vehicles and is scheduled to report Q4 earnings on February 20.
