Tesla’s Sales Growth Unlikely, Robotaxi Success Faces Challenges, According to Bernstein

Tesla Inc. is projected to struggle with annual sales growth this year, despite recent price cuts, according to analysts at Bernstein. They caution that the electric vehicle manufacturer is on a challenging path that won’t necessarily improve with the anticipated introduction of robotaxis.

In a note released on Wednesday, Bernstein analysts expressed skepticism about Tesla’s ability to increase unit sales this year, even if prices are significantly lowered or financing becomes more favorable.

Tesla’s recent Q3 deliveries were reported at 435,059, which fell short of Wall Street’s forecast of approximately 461,000 units.

The analysts predict that Tesla will deliver around 1.8 million units in 2024, which is below the company’s ambitious target of 2 million and signifies stagnant growth compared to the previous year. There are expectations that new, lower-priced models—set to begin production in the first half of 2025—won’t substantially boost demand. They anticipate that any improvements to existing models will be “modest,” and a more affordable Model 2 is unlikely to be available in significant quantities before 2026.

As investor attention shifts towards Tesla’s robotaxi initiative, Bernstein points out that the company is not only facing fierce competition but also significant regulatory challenges that could hinder its ability to surpass rivals.

The analysts emphasize that Tesla is lagging in obtaining the necessary regulatory approvals for robotaxi operations, and overcoming these hurdles may prove difficult without continuous local trials. This warning comes just days before Tesla’s upcoming robotaxi event.

Looking to the future, Bernstein believes Tesla will continue to encounter similar difficulties due to an aging product lineup and increasing competition. They maintain an underperform rating on the stock.