Deutsche Bank (DB) has increased its price target for Tesla (TSLA) to $370 from $295 following insightful discussions at recent investor meetings led by Tesla’s head of investor relations, Travis Axelrod. The meetings as reported by YF, highlighted not only Tesla’s ambitious projects like Full Self-Driving (FSD), robotaxis, and the Optimus robot but also shed light on the company’s upcoming vehicle lineup.
Among the key revelations was the introduction of a new model tentatively named ‘Model Q’, expected to launch in the first half of 2025. This vehicle is projected to be priced under $30,000 with subsidies, or around $37,499 without the U.S. EV tax credit, aiming to significantly expand Tesla’s total addressable market (TAM). Analyst Edison Yu from Deutsche Bank also hinted at the possibility of a new three-row, longer wheelbase variant of the Model Y for the Chinese market, further broadening Tesla’s product offerings.
The discussions also touched on Tesla’s plans to increase production capacity within existing facilities, with expectations of a 25%-30% volume growth in 2025. This optimism comes amidst concerns over demand and delivery growth, as underscored by Goldman Sachs (GS) analyst Mark Delaney’s recent lowered Q4 delivery estimates for Tesla and reports of temporary furloughs at the Cybertruck line due to supply buildup.
Despite these challenges, analysts remain bullish, buoyed by the prospect of new, more affordable vehicles. Bank of America (BAC) analyst John Murphy also revised his price target upwards after a visit to Giga Austin, citing the potential market expansion with Tesla’s new cost-effective EV.
On the technological front, Tesla is pushing forward with its FSD capabilities. Yu reported that the latest version of FSD (V13) is currently rolling out, promising a substantial performance improvement, reducing critical interventions to approximately one every 10,000 miles. Management also indicated that unsupervised FSD might see a rollout between Q2 and Q3 of the following year, with initial Robotaxi testing planned for 2025 in California and Texas using a company-owned fleet and teleoperators for safety.
The optimism around Tesla’s robotaxi service is further fueled by expectations of regulatory ease under the incoming U.S. administration. Yu believes that forthcoming federal guidelines from the National Highway Traffic Safety Administration (NHTSA) could streamline the deployment of robotaxis, not just domestically but internationally as well.
These developments have propelled Tesla’s stock up more than 3% to $402.99 in midday trading, aiming for a five-day winning streak, as investors and analysts alike digest the potential for Tesla to continue its growth trajectory with new products, enhanced software, and supportive regulatory changes.
