Tesla’s (NASDAQ:TSLA) journey is marked by a blend of innovation and challenges. The EV leader is gearing up to launch a more affordable vehicle in the first half of 2025, aiming to make electric mobility accessible to a broader audience. Additionally, Tesla plans to introduce Full Self-Driving (FSD) technology in Austin by June 2025 – potentially a game-changer for autonomous driving.
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Yet, Tesla’s latest Q4 results handed bears plenty of ammunition. The company fell short on most of the important metrics with the stock now appearing to have lost momentum.
Still, as Stifel’s Stephen Gengaro notes, it wasn’t all bad. The analyst highlights several reasons for optimism: a record-low cost of goods sold per unit, the highly anticipated budget EV, the ramp-up of Optimus production, and a bullish outlook for Energy Storage. But the real headline? The expected public rollout of unsupervised FSD, which Gengaro believes would be a “significant step for FSD and underpin the Robotaxi initiative, both of which are key to the long-term value of TSLA.”
That said, it’s hard to ignore the negatives, such as ongoing pricing headwinds, while competition from Chinese automakers is only intensifying. Meanwhile, Tesla’s short-term sales could be impacted by a favorability rating that is “near all-time lows.”
That mostly makes sense, but you might be wondering what that “favorability rating” is all about. Well, that is survey data used by the Stifel Think Tank Group that compares Tesla’s net favorability with net purchase interest. It currently shows that Tesla’s net favorability dropped to 3% for the week ending on January 27, down from 9% in January 2024 and 33% in January 2018.
The reason for the drop is pretty obvious: CEO Elon Musk’s support for President Trump and his actions in the newly-formed U.S. Department of Government Efficiency (DOGE). Democrats are obviously wary of giving government data to an unelected billionaire, while many Republicans support DOGE or appreciate Musk’s backing of Trump.
The problem for Tesla, however, is that survey data on consumer perceptions of EVs by political affiliation has remained “fairly consistent,” and shows that future EV buyers are more likely to be Democrats. “That being said,” Gengaro added, “we believe some Republicans are strongly against mandates, and the removal of mandates (and possible positive view of Elon Musk) could prompt some ‘never EV’ Republicans to consider an EV.”
That remains to be seen. For now, on the back of “mixed 4Q24 results, uncertainty caused by the Trump Administration, and TSLA’s low favorability ratings,” Gengaro has lowered his price target on TSLA from $492 to $474. Even so, that still implies a 35% upside from current levels. Gengaro’s rating remains a Buy. (To watch Gengaro’s track record, click here)
Overall, the bulls and skeptics are evenly split here, with 12 Buys and Holds, each, yet with an additional 10 Sells, the stock only claims a Hold (i.e., Neutral) consensus rating. Going by the $335.86 average price target, the shares have limited upside ahead. (See Tesla stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
