Contents
In the ever-changing electric vehicle (EV) landscape, Tesla (TSLA) underwent a rollercoaster in 2023, with stock doubling post a lackluster 2022. Wall Street now scrutinizes the growth narrative, presenting both bullish and bearish sentiments. As 2024 approaches, a pivotal year for Tesla’s core EV business, the focus is on the challenges and opportunities ahead. Analysts keenly observe Tesla stock in 2024, gauging the company’s adaptability in a competitive market shaped by regulatory shifts and technological advancements. The stock’s performance will be a crucial indicator of Tesla’s continued success and resilience.
Highlights
- Tesla’s stock doubled in 2023 after a lackluster 2022, but Wall Street projects a dip in earnings for 2024, indicating potential headwinds for the EV giant.
- Analysts highlight concerns about eroding margins due to aggressive price cuts, rising expenses, and intensified global EV competition, creating uncertainties around Tesla’s growth narrative.
- Despite strong deliveries in China, competition from Chinese EV manufacturers and reservations about demand for existing models pose challenges to Tesla’s sustained dominance in 2024.
- Analysts express uncertainty about Tesla’s future product releases and the impact of regulatory pressures, investigations, and recalls on the company’s legal and financial standing in 2024.
Tesla’s 2023 Performance and Wall Street Projections
The year 2023 saw Tesla’s stock surge, bouncing back from a challenging 2022. However, Wall Street anticipates a dip in earnings for 2024, signaling potential headwinds for the EV pioneer. Analysts project a 6% decline in earnings per share (EPS) to $3.83, despite a 45% increase in revenue to $118.51 billion. The divergence from initial 2023 projections highlights uncertainties surrounding Tesla’s growth story.
Factors Influencing the Performance of Tesla Stock in 2024
Tesla’s aggressive price cuts in 2023 impacted auto gross margins, which fell below 20%. Analysts express concerns about eroding margins and a potential waning of the growth narrative. While optimistic voices predict margin stabilization and upward movement in 2024, the lingering question is whether Tesla’s price cuts are a thing of the past.
The fluctuating landscape of EV battery costs, coupled with rising labor expenses and intensifying global EV competition, poses challenges for Tesla’s profitability in 2024. Additionally, regulatory pressures are mounting, with ongoing investigations into faulty parts and recalls, adding potential legal and financial burdens,These factors contribute to the uncertainties surrounding the Performance of Tesla Stock in 2024.
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Tesla’s Position in China and Global Competition
Despite challenges, Tesla’s deliveries in China appear robust, driven by the Model Y. However, formidable competition from Chinese EV manufacturers like BYD, Nio, and Li Auto raises questions about Tesla’s sustained dominance. The decision by BYD to open a plant in Europe and intensify its global presence adds a new dimension to the competitive landscape.
Concerns About Tesla’s Vehicle Lineup
Analysts express reservations about the demand for Tesla’s existing lineup in 2024. Guggenheim’s Ronald Jewsikow points to a “sobering reality” of constrained demand for Tesla’s current offerings, particularly the Model Y and Model 3. Sacconaghi goes further, suggesting that Tesla may not introduce a “new high volume offering” until 2026, leaving uncertainty about future product releases.
Impact of Tax Credit Changes and European Subsidy Shift
Changes in tax credits for certain Tesla variants in the U.S. and the abrupt end of EV subsidies in Germany and France pose additional challenges for Tesla in 2024. Price adjustments and potential additional cuts may be required to navigate the evolving demand dynamics.
Cybertruck and Next-Generation Electric Vehicle
While the Cybertruck’s formal deliveries began in November 2023, its impact on Tesla’s business in 2024 remains uncertain. Analysts like Sacconaghi predict a small addressable market for the Cybertruck, with potential headwinds to gross margins. The anticipation of a next-generation electric vehicle priced at $25,000 adds to the bullish outlook, yet questions linger about its delivery timeline, eligibility for tax credits, and manufacturing challenges.
Tesla Stock Performance and Analyst Ratings
Tesla’s stock performance, with a recent rally and the formation of a double-bottom base, reflects a mix of optimism and caution. Analyst ratings oscillate between “hold” and bullish targets, with a mean rating suggesting a cautious stance. However, individual analysts like Ives and Jonas maintain higher price targets, underscoring the divergence of opinions on Tesla’s future trajectory.
Conclusion
As Tesla navigates the complexities of 2024, the narrative surrounding its EV business faces uncertainties. From regulatory challenges to global competition and shifts in subsidies, Tesla’s path forward is marked by both obstacles and opportunities. The bullish bets on the Cybertruck, next-gen electric vehicle, and long-term speculative plays in AI and self-driving technology present a contrasting perspective. Investors, analysts, and enthusiasts alike will closely watch how Tesla steers through the challenges and capitalizes on its innovative vision in the evolving landscape of electric mobility impacting Tesla stock in 2024.
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