RBC Capital has reiterated its Outperform rating on Tesla ahead of its first quarter delivery report, expected for April 2.
The Royal Bank of Canada subsidiary estimates the company to deliver 367,000 vehicles between January and March, 2,000 units below the Visible Alpha consensus.
The Canadian bank expects Tesla deliveries to increase by a modest 9% year over year, despite the 23.7% drop compared to the final quarter of 2025, as the first quarter is typically slower in sales.
RBC forecasts US sales to be down year over year due to the expiration of the $7,500 tax credit on September 30, 2025.
US Sales
In a new research note, analyst Tom Narayan wrote that the forecast implies “the absence of the IRA consumer credit” in the United States, for which consequences have been felt since September 30.
The expiration of the $7,500 federal EV tax credit by the end of the third quarter drove Tesla sales to an all-time quarterly record.
The surge was followed, however, by a weaker-than-expected fourth quarter — going against the industry’s typical pattern of it being the strongest period of the year.
In the past six months, Tesla launched the Model Y and Model 3 Standard — first in the US, then in Europe — which have lowered the entry-level prices on its best-selling vehicles by around $5,000.
During the first quarter, Tesla also released a more affordable version of the Cybertruck pick-up, with prices starting from $59,990 for the first ten days.
Demand for the model has jumped — with orders placed as of March 26 expected to be delivered only in 2027.
Shift to Autonomy
According to Narayan, Tesla‘s continued shift towards autonomy will likely continue to affect private vehicle sales.
“Model S and X discontinuation in Q2/26 reflects a strategic pivot to robotaxi and humanoids, potentially pressuring private vehicle sales going forward,” the analyst stated.
Tesla announced in January that it would end production of its two flagship models, with its manufacturing lines transitioning to manufacturing operations of the Optimus humanoid robot.
The company expects to only produce autonomous vehicles and the second generation of the Roadster model — for which the unveiling is expected in “late April” — in the future.
According to Musk, it’s “probably true” that people will forget Tesla ever built cars after the company launches the Optimus V3.
The company is nearing production of its Cybercab model — its first purpose-built, fully autonomous vehicle.
Still, RBC Capital believes that “prolonged elevated fuel costs could bolster near-term EV demand, providing some upside for Tesla.”
Oil prices have increased during March due to the ongoing conflict in the Middle East.
Valuation
RBC Capital Markets has reiterated its $500 price target on Tesla, originally set on October 10, 2025 — when the firm raised it from $325.
The increase came after RBC “hosted investors at Tesla‘s Giga Berlin facility,” where the Optimus humanoid robot was a central topic of discussion.
Much of Tesla‘s current valuation depends on the successful execution of its autonomy projects.
About two weeks after the price target hike, RBC noted progress in the Robotaxi services and added that while “Optimus development remains a significant challenge, Tesla‘s manufacturing scale and vertical integration provide a competitive edge in bringing humanoids to market.”
Following Tesla‘s fourth-quarter earnings report in January, RBC analyst Tom Narayan wrote that “while Tesla is focused on its humanoid path, we could envision a scenario where the company could make a strategic pivot to specialized form factors to satisfy demand.”
Stock Performance
The target implies an upside potential of 29.6% on the stock, based on its closing price of $385.95 on Wednesday.
As of press time, Tesla was trading 1% lower at $381.60 on Thursday’s market session.
Last week, Tesla shares dropped below $380 for the first time in six months.
They reached their lowest point at $364.46 since September, extending a steep decline from the all-time high of $498.83 set in late December.
The decline came amid renewed scrutiny of Tesla‘s driver-assistance technology and a new billion-dollar deal between Uber and the Irvine-headquartered EV maker Rivian.
