Wall Street says Tesla really isn’t about cars anyway
It’s more about the hazy and tough-to-quantify potential for Musk’s business.
So Tesla’s fourth-quarter auto deliveries whiffed versus expectations and year-over-year annual sales were down for the first time since the company went public.
Not great. But analysts have been saying for a while that the bull case for Tesla simply can’t be premised on growth in the EV auto market.
No, the storyline now is all about the hazy and tough-to-quantify potential for businesses like Tesla’s full self-driving software and Cybercab under a Trump administration. Trump seems fairly receptive to ideas from Tesla CEO Elon Musk, who, after all, dipped into his spare-change jar and spent about $250 million to make Trump 2.0 a reality.
“We reiterate our belief that traction on [full self-driving] and Cybercab will be critical drivers to TSLA shares in 2025,” wrote Stephen Gengaro, an analyst covering Tesla for brokerage firm Stifel.
Analysts at Baird wrote that they “believe growth in the Energy business, launching (and scaling) a robotaxi business, and expanding the capabilities/use of Optimus are additional milestones to watch for,” The Wall Street Journal reported.
Generating excitement about the future among retail shareholders is a speciality of Musk, and arguably it’s that skill — and his alchemical ability to transform it into a financial advantage in the form of dirt-cheap capital from a devoutly loyal shareholder base — that has made him the world’s wealthiest man.
On the other hand, at a certain point excitement has to turn into tangible results. And the never-ending delays and lack of details surrounding the Cybercab, for instance, or the problems with Tesla’s self-driving software — analysts from Truist on Thursday published a note that bluntly said they couldn’t recommend using full self-driving as it’s “not ready for prime time yet” — could be a concern, especially if the company can’t reverse Tesla’s stalled-out auto sales.
On that front, it’s pretty clear that Musk’s personal hobby of meddling in politics — his latest political project, for some reason, is doubling down on support for Germany’s extreme right-wing party, AFD — is perhaps unsurprisingly a turnoff to would-be buyers of electric vehicles.
