Company Reports

Tesla reported 443,956 vehicles delivered during the second quarter, which is a 5% decline year over year versus the prior-year quarter. We've updated our model to assume lower 2024 deliveries. We now expect a slight decline versus our prior forecast for deliveries to be slightly up on the year. Separately, we've updated our model to assume higher energy storage deployments, as we expect higher growth in this business following Tesla's record 9.4 GWh deployments during the second quarter. Having updated our model to reflect these changes, we maintain our $200 fair value estimate for Tesla. Our narrow moat rating is also unchanged.

Tesla is one of the largest battery electric vehicle automakers in the world. In less than a decade, the company went from a startup to a globally recognized luxury automaker with its Model S and Model X vehicles. The company competes in the entry-level luxury car and midsize crossover sport utility vehicle markets with its Model 3 and Model Y vehicles. Tesla also sells a light truck—the Cybertruck, and a semi truck. The company plans to launch an affordable SUV and luxury sports car in the future.

Tesla reported the results of its annual shareholder meeting on June 13. Shareholders voted with the board recommendations on nearly every proposal, including approving CEO Elon Musk's 2018 compensation package as well as reincorporating in the US state of Texas from Delaware. We see no reason to change our outlook for Tesla as a result of the vote. Accordingly, we maintain our $200 fair value estimate. Our narrow moat rating is also unchanged.

The US on May 13, 2024, announced a series of new tariffs on Chinese imports. These include a 100% tariff on electric vehicles and a 25% tariff on lithium-ion batteries and battery parts. There was also a 25% tariff on critical minerals, which include graphite, permanent magnets, and cobalt.

Tesla is one of the largest battery electric vehicle automakers in the world. In less than a decade, the company went from a startup to a globally recognized luxury automaker with its Model S and Model X vehicles. The company competes in the entry-level luxury car and midsize crossover sport utility vehicle markets with its Model 3 and Model Y vehicles. Tesla also sells a light truck—the Cybertruck, and a semi truck. The company plans to launch an affordable SUV and luxury sports car in the future.

We see no reason to change our $200 fair value estimate or narrow moat rating for Tesla following media reports that Tesla is undertaking a new wave of layoffs. This round includes Tesla letting go of nearly all of the supercharging team.

On April 29, Tesla shares rose over 10% at the time of writing. The rally was due to multiple media outlets reporting that Tesla cleared regulatory hurdles in China and was given tentative approval by the Chinese government to begin selling its full self-driving driver-assistance software (FSD). The move should drive Tesla sales higher in China, where the automaker is facing increasing competition with many electric vehicle manufacturers competing on lower prices. Additionally, the ability to sell FSD software in a new market should drive higher adoption rates. In our view, Tesla's FSD is currently a differentiator as we view Tesla as a leader in driver-assistance software. For FSD in China, Tesla will partner with Baidu to use Baidu's mapping and navigation services, which should help accelerate FSD in China.

We've raised our fair value estimate for narrow-moat Tesla to $200 per share from $195 following first-quarter earnings, due to an improved near-term outlook. Shares were up over 10% in after-hours trading as the market reacted positively to management's outlook. At current prices, we view Tesla as undervalued, with the stock trading in 4-star territory.

Tesla is one of the largest battery electric vehicle automakers in the world. In less than a decade, the company went from a startup to a globally recognized luxury automaker with its Model S and Model X vehicles. The company competes in the entry-level luxury car and midsize crossover sport utility vehicle markets with its Model 3 and Model Y vehicles. Tesla also sells a light truck—the Cybertruck, and a semi truck. The company plans to launch an affordable SUV and luxury sports car in the future.

On April 15, Tesla shares fell 3%. Share declines relate to Tesla’s plan to lay off more than 10% of its workforce and the departure of at least one high-level executive. The move is consistent with Tesla's strategic shift toward profitability over deliveries growth in 2024. Tesla has historically adjusted its workforce based on its strategy, hiring during periods of growth and reducing headcount during slowdowns.

On April 5, Tesla shares fell as much as 6% during the day on a Reuters article stating Tesla will cancel its plans to build an affordable vehicle, instead using the same small vehicle platform to build robotaxis. On Tesla's prior earnings call, management said it aimed for the affordable vehicle to enter production by the end of 2025 and hailed the vehicle as the driver of the next phase of growth for Tesla. Less than an hour after the article was published, Tesla CEO Elon Musk disputed Reuters' claim in a post on the social media platform X, formerly known as Twitter. After Musk's post, Tesla shares rallied and were down just over 3% at the time of writing.

Tesla announced 2024 first-quarter deliveries of 386,810 vehicles, down roughly 8.5% versus the first quarter of 2023. We have updated our model to assume full-year 2024 deliveries come in roughly flat versus 2023 at a little over 1.8 million vehicles, down from our prior forecast for 10% growth. With our long-term outlook largely unchanged, we reduce our Tesla fair value estimate to $195 per share from $200. Our narrow moat rating is unchanged.

Tesla is one of the largest battery electric vehicle automakers in the world. In less than a decade, the company went from a startup to a globally recognized luxury automaker with its Model S and Model X vehicles. The company competes in the entry-level luxury car and midsize crossover sport utility vehicle markets with its Model 3 and Model Y vehicles. Tesla also sells a light truck—the Cybertruck, and a semi truck. The company plans to launch an affordable SUV and luxury sports car in the future.

Tesla CEO Elon Musk's 2018 performance award has been voided by a Delaware judge following a shareholder lawsuit. The ruling can be appealed in the Delaware Supreme Court. However, whether or not the performance award holds up in court does not change our outlook for Tesla. Accordingly, we maintain our $200 per share fair value estimate and narrow moat rating.

Tesla is one of the largest battery electric vehicle automakers in the world. In less than a decade, the company went from a startup to a globally recognized luxury automaker with its Model S and Model X vehicles. The company competes in the entry-level luxury car and midsize crossover sport utility vehicle markets with its Model 3 and Model Y vehicles. Tesla also sells a light truck—the Cybertruck, and a semi truck. The company plans to launch an affordable SUV and sports car in the coming years.

Our key takeaway from the Tesla earnings call was the firm's strategic shift to the development and ramp-up of the new affordable sport utility vehicle, while focusing on cost cuts for its existing vehicles. This marks a change from the 2023 strategy, which was to cut prices to generate strong volume growth. We updated our forecast for lower near-term deliveries growth and lower near-term automotive gross profit margins. As a result, we reduce our fair value estimate to $200 per share from $210. We maintain our narrow-moat rating.

Tesla is one of the largest battery electric vehicle automakers in the world. In less than a decade, the company went from a startup to a globally recognized luxury automaker with its Model S and Model X vehicles. The company competes in the entry-level luxury car and midsize crossover sport utility vehicle markets with its Model 3 and Model Y vehicles. Tesla also sells a light truck—the Cybertruck, and a semi truck. The company plans to launch an affordable SUV and sports car in the coming years.

Tesla announced fourth-quarter deliveries of 484,507 vehicles and full-year deliveries of 1.81 million vehicles, both records for the company. The deliveries number was roughly in line with our 2023 forecast and indicates continued consumer demand for Tesla vehicles, in our view. With the deliveries results close to our forecast, we see no reason to change our outlook for the company. We maintain our $210 fair value estimate and narrow moat rating.

Tesla held its Cybertruck launch event that showcased the light truck's performance and design. After viewing the event, we see no reason to change our outlook and maintain our $210 per share fair value estimate for Tesla. Our narrow moat rating is also unchanged.

Tesla is one of the largest battery electric vehicle automakers in the world. In less than a decade, the company went from a startup to a globally recognized luxury automaker with its Model S and Model X vehicles. The company also competes in the entry-level luxury car and midsize crossover SUV markets with its Model 3 and Model Y vehicles. Tesla also plans to sell new vehicles over the next several years, including a light truck, a semi truck, a sports car, and an affordable sedan and SUV.