Tesla Could Drop Over 13% Due to Trump's Potential EV Tax Credit Cuts, FSD And Delivery Concerns, Says Gary Black

Tesla Inc. (NASDAQ:TSLA) faces diverging forecasts for its 2025 delivery growth, with Wall Street’s expectations clashing with independent analysts’ predictions amid uncertainty over new vehicle launches and potential policy changes.

What Happened: The Future Fund LLC‘s Managing Partner Gary Black highlighted on Sunday that while Wall Street projects Tesla’s fiscal 2025 deliveries at 2.07 million units, representing 16% year-over-year growth, respected Tesla forecaster Troy Teslike anticipates a 1% decline.

This contrasts with CEO Elon Musk‘s guidance of 20-30% growth provided during the third-quarter earnings call.

Black emphasized that Tesla’s 2025 performance hinges on three key factors: the success of the Model Y Juniper refresh, demand for the upcoming $30,000-$35,000 vehicle expected to be unveiled in the first half of 2024, and progress in Full Self-Driving technology.

Wall Street may lower its 2025 delivery forecast of 2.07 million units (+16% YoY) and earnings projection of $3.24 per share (+34% YoY), potentially pushing Tesla’s stock down to the $350-$375 range, a decline on approximately 13%, irrespective of management’s statements on autonomy, according to Black.

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Why It Matters: The potential elimination of the $7,500 federal EV tax credit under the President Donald Trump administration poses additional challenges. Black argues this would disproportionately impact Tesla, with U.S. sales representing 30-35% of its global volume, compared to just 4-5% for traditional automakers’ EV sales.

Wedbush Securities analyst Dan Ives maintains a more optimistic outlook, recently raising Tesla’s price target to $550, citing growing confidence in demand and autonomous driving potential. However, Tesla’s fiscal 2025 and 2026 earnings estimates have declined 39% and 45% respectively over the past year.

The upcoming earnings call could be pivotal, with Wall Street closely watching fourth-quarter automotive gross margins, forecast at 16.2% excluding regulatory credits. The previous quarter saw better-than-expected margins of 17.1%, though CFO Vaibhav Taneja cautioned about sustainability challenges in the current economic environment.

Price Action: Tesla stock closed at $406.58 on Friday, down 1.41% for the day. In after-hours trading, the stock dipped further by 0.27%. Over the past year, Tesla’s stock surged 121.87%, according to data from Benzinga Pro.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.