Written by Cláudio Afonso | LinkedIn | X
Morgan Stanley analyst Adam Jonas lowered on Thursday the firm’s price target on Tesla as it reduces vehicle delivery estimates by 64,000 units to 351,000 vehicles.
The analyst said in a new research note that the firm is reducing the target to $410 from $430 while reaffirming a Overweight rating. Tesla shares closed at $236 on Thursday suggesting that the price target — despite reduced — still represents an upside potential of 73.7%.
Tesla shares have dropped 41.50% year-to-date.
“We reiterate our view that while Tesla’s YTD auto deliveries have been mostly below expectations, it is not particularly narrative changing for our investment thesis,” the analyst wrote before detailing the reduction of delivery estimates.
“With this report, we lower Tesla’s auto deliveries for both the first quarter and the full year driven by competition, an aging lineup and a buyers’ strike from negative brand sentiment and upcoming new product
Morgan Stanley reduced its forecast of annual deliveries to 1.615 million which would represent a year on year decline of 9.8% when compared to 2024. Previously, Adam Jonas was forecasting the carmaker to post a 7.5% growth with 1.924 million EVs delivered.
In the long run, for 2030, the firm cut its estimates to 4.7 million units, down from 5.2 million previously.
“Our conversations with investors and recent survey showed that investors are beginning to contemplate lower y/y volume (with 21% expecting deliveries down by more than 10% y/y), a marked shift from our Tesla Bull Bear Lunch in January where sentiment on full year growth was far more bullish,” the analyst wrote.
Morgan Stanley said “slower delivery ramp” caused a reduction on its “Core Auto contribution to our lowered price target (now less than 20% of our $410 PT) and flows through to lower Network Services valuation ($161 of our $410 PT) due to a lower Tesla car park on which to attach high margin recurring services.”
Commenting on January sales, the firm said figures “disappointed across the board” as Europe sales fell -45% year on year, “China retail sales -15% y/y and tracking lower vs. local EV OEMs (BYD up over 45% y/y), and US January sales -16% y/y (from Motor Intelligence).”
“The softness continued into February, though the rate of decline y/y may incrementally be moderating in some regions. In the US, Tesla Model Y February sales declined 23% y/y; in Europe, Tesla February sales declined 26% and 76% y/y in France and Germany, respectively,” Adam Jonas added.
For the Chinese market, the analyst says the numbers are “weaker than expectations” noting that “the most recent data reported by Greater China Auto analyst Tim Hsiao has shown weekly sequential upticks in March.”
Tesla has registered orders of 14-16k for the week of March 10-17, up from orders of 13-15k for the week of March 3-10, and up from 11-13k the week prior. We accordingly lower 1Q25 deliveries to 351k (-9.3% y/y) vs. 415k (+7.3% y/y) previously.”
Piper Sandler analyst Alexander Potter also lowered the price target on the company earlier this Thursday to $450.00 from $500.00 while keeping an Overweight rating.
Earlier this week, also Mizuho analyst Vijay Rakesh lowered the firm’s 2025 Tesla delivery forecast to 1.8 million vehicles from a previous estimate of 2.3 million, citing demand concerns and market headwinds.
The firm also cut its price target on Tesla to $430 from $515 while maintaining an Outperform rating. The new target implies a 72% upside from Tesla’s Friday closing price of $249.98.
Last week, Wells Fargo cut its Tesla price target to $130 from $135, citing a “shocking” drop in European sales and “concerns about political backlash from Elon’s Trump support.”
Tesla plans to produce a lower-cost version of its Model Y at its Shanghai factory in an effort to regain market share in China, its second-largest market, Reuters reported last week.
The new model, developed under the codename “E41,” will be smaller and at least 20% cheaper to manufacture than the refreshed Model Y launched in late 2024, according to three people familiar with the matter.
