Morgan Stanley Lowers Tesla Price Target and Q1, 2025 & 2030 Delivery Estimates

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Morgan Stanley Adjusts Tesla Price Target Amid Delivery Concerns

Morgan Stanley, known for its bullish outlook on Tesla, has recently altered its stance by decreasing the price target for Tesla shares from $430 to $410. This adjustment comes in light of diminishing delivery forecasts for both the first quarter and full year of 2025. The focus on Tesla’s vehicle deliveries has intensified this month, coinciding with a decline of 19% in the company’s share price so far.

The Impact of Political Factors and Production Delays

Investors are increasingly scrutinizing how CEO Elon Musk’s political engagements might influence demand for Tesla vehicles. Additionally, analysts are considering whether the combination of slower production rates and product upgrades is affecting sales negatively.

Tesla’s Recall Problem and Stock Performance

During the latest trading session, Tesla’s shares remained stable, despite the company announcing a recall of 46, 000 Cybertrucks due to trim detachments that could lead to accidents. Notably, since a peak following the December elections, Tesla’s stock has seen a staggering drop of over 50%, driven largely by waning investor confidence regarding delivery projections.

Revised Delivery Estimates for Tesla

In its recent report, Morgan Stanley downgraded its forecast for Tesla’s vehicle deliveries, specifying a reduction of 64, 000 units in the first quarter, bringing the expected total down to 351, 000. This represents a decline of 9.3% year-over-year, a stark contrast to earlier optimistic growth expectations of around 7.3%.

Analyst Adam Jonas noted, “FY25 is now projected at 1.615 million units, reflecting a 9.8% decline, while FY30 estimates have been adjusted to 4.7 million from 5.2 million.”The core automotive segment now represents less than 20% of Morgan Stanley’s adjusted share price target, indicating that reduced vehicle availability will impact revenue generation from services.

Long-term Outlook and Analyst Sentiments

Despite the downgrade, Morgan Stanley maintains an “Overweight”rating on Tesla shares, considering the stock a top pick in the U. S.auto sector. Jonas has previously suggested that the current dip in Tesla’s share prices could present a compelling investment opportunity.

Additionally, Cantor analyst Andres Sheppard expressed optimism regarding Tesla’s potential, citing future revenue opportunities from Full Self-Driving (FSD) technology, Robotaxi services, energy storage solutions, and the Optimus Bots. The firm believes these innovations will play a critical role in Tesla’s long-term growth strategy.