Since Donald Trump reclaimed the presidency, Tesla shares are up 50%, rebounding from drops tied to production issues and rising EV competition.
Trump’s proposed rollback of EV subsidies, which would mean higher costs for buyers, could reshape EV-market dynamics.
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But Tesla Chief Executive Elon Musk sees potential profits for the EV market.
"Take away the subsidies [and] it will only help Tesla," Musk posted in July on X.
Tesla is now the only profitable U.S. EV maker. If peer automakers like Ford and GM cut EV production due to losses from a removed tax credit, Tesla could benefit from reduced competition and fewer options for buyers.
Related: Tesla analysts update views after Q3 deliveries
Trump has nominated Musk, along with former Republican presidential candidate Vivek Ramaswamy, to lead a new Department of Government Efficiency.
Musk has consistently advocated reducing government spending and streamlining regulations. He has suggested he could cut at least $2 trillion from the federal budget. The U.S. government spent $6.8 trillion in fiscal 2024, ended Sept. 30, with a budget deficit of $1.8 trillion.
Critics say that Musk's proposal could decimate payments to individuals, including via Social Security, Medicare, Medicaid and more, CNN reported .
Wedbush analyst Dan Ives said the appointment is “another indicator that Musk will have a major seat at the table in the White House" and "ultimately a positive for Tesla as Trump will fast-track the autonomous and AI initiatives,” Barron's reported.
Tesla might not grow deliveries in '24, Goldman Sachs says
Tesla’s delivery growth this year is still under doubt.
The company’s deliveries in Q1 (386,810) and Q2 (443,956) this year were down 8.5% and 4.8% respectively from a year earlier. It delivered 462,890 vehicles in Q3, up 6% from a year earlier.
In 2023, Tesla delivered 1.8 million vehicles, up 38% from 2022. To surpass that record, Tesla would need to deliver more than 516,000 vehicles in Q4 2024.
Its current quarterly delivery record is 484,507 vehicles, set in Q4 2023.
Related: Analyst revisits Tesla stock price target amid Optimus robotics push
"Despite ongoing macroeconomic conditions, we expect to achieve slight growth in vehicle deliveries in 2024," Tesla said in its Q3 earnings release.
Goldman Sachs analyst Mark Delaney predicted on Dec. 4 that Tesla was not on track to meet its goal to grow vehicle deliveries in 2024, according to thefly.com.
The analyst lowered the investment firm's Q4 deliveries estimate to 510,000 units from 515,000, while the consensus estimate is 515,000. Goldman Sachs maintains a neutral rating on Tesla with a $250 stock price target.
Tesla has implemented various discounts and incentives to boost sales. Goldman Sachs expects Tesla to rely more on incentives to hit volume targets, partly to clear inventory of the Model Y midsize SUV before a refreshed version launches, possibly in early 2025.
Deutsche Bank raises Tesla price target
Deutsche Bank raised Tesla’s stock price target to $370 from $295 while maintaining a buy rating, thefly.com reported on Dec. 9.
Analyst Tim Rokossa warned of a challenging environment for the EV market ahead. “Automotive stocks are having a hard time globally. Unfortunately, we believe the industry is likely to head into another year of volatility and headwinds across regions,” Rokossa said.
More Tesla:
Deutsche says investors will favor "safe havens" in autos for 2025, focusing on companies with strong margins and growth less affected by market challenges. The firm recommends select suppliers and advises caution with traditional carmakers.
Deutsche continues to like Tesla into 2025. Tesla is one of the firm’s top stock picks for 2025, with China's BYD ( BYDDY ) and Geely ( GELYY ) recommended for the first half of the year and Nio ( NIO ) and Li Auto ( LI ) for the second half.
Tesla stock traded at around $386 on Dec. 9. The stock is up 55% year-to-date.
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