Tesla Q4 Deliveries Slump: Deutsche Bank Cuts Forecast to 405K, Raises Price Target to $500

• Deutsche Bank (DB) analyst Edison Yu forecasts Tesla’s Q4 2025 deliveries at approximately 405,000 vehicles, reflecting a 14% year-over-year decline and a 19% sequential drop, driven primarily by weakness in Europe and North America, with a more moderate 10% decline in China.
• Full-year 2025 deliveries are expected to reach 1.62 million units, falling short of consensus estimates of 1.66 million and implying a 9% decline from 2024, while automotive gross margin excluding credits is projected to fall to 14.4%.
• Despite near-term pressures, Deutsche Bank maintains a ‘Buy’ rating on Tesla (TSLA) with a raised price target of $500, supported by optimism around the robotaxi program and recent progress in internal testing.

Deutsche Bank (DB) analyst Edison Yu has revised his outlook for Tesla’s (TSLA) fourth-quarter 2025 vehicle deliveries, projecting approximately 405,000 units. This figure represents a 14% decline from the fourth quarter of the previous year and a 19% drop from the third quarter of 2025. The shortfall is driven primarily by weaker demand in Tesla’s core Western markets, where deliveries in Europe and North America are expected to fall by 34% and 33%, respectively. In China, volumes are also anticipated to decline, though by a more moderate 10%. Registration data through November showed roughly 100,000 units, against Deutsche Bank’s full-quarter estimate of 178,000 deliveries. Yu noted that December typically represents Tesla’s strongest month in China, a seasonal pattern expected to persist this year, potentially accelerated by the introduction of a higher new-energy vehicle consumption tax in 2026.

Outside the major regions, deliveries are projected to grow more than 60% year over year, providing a partial offset to the broader weakness. Lower production and delivery volumes are expected to pressure profitability, with automotive gross margin excluding regulatory credits forecast to decline sequentially to 14.4%, a 100-basis-point reduction from the third quarter, largely due to reduced fixed-cost absorption.

For the full year 2025, Yu believes consensus delivery expectations of 1.66 million vehicles are too optimistic. Deutsche Bank now models 1.62 million units, implying a 9% decline from 2024 based on its fourth-quarter assumptions.

Despite these near-term challenges, Yu maintains a bullish longer-term perspective on Tesla, driven by progress in its robotaxi program. Recent internal validation testing in Austin, where Tesla has removed safety drivers from certain vehicles, is seen as an encouraging step toward a broader rollout. Although Elon Musk has previously referenced ambitious targets, such as a fleet of about 1,000 robotaxis in the Bay Area and more than 500 in Austin, Deutsche Bank’s tracking suggests these levels are unlikely to be achieved in the near term.

Reflecting this view, Deutsche Bank has raised its price target on Tesla (TSLA) stock by $30 to $500, maintaining a ‘Buy’ rating. The increase incorporates higher valuation multiples assigned to the robotaxi and humanoid initiatives, partially offset by more conservative assumptions for the core automotive business.

WallStreetPit does not provide investment advice. All rights reserved.

• Bulenox: Get 45% to 91% OFF ... Use Discount Code: UNO
• Risk Our Money Not Yours | Get 50% to 90% OFF ... Use Discount Code: MMBVBKSM