Wolfe discusses key swing factors for Tesla stock

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Analysts from Wolfe Research recently highlighted several pivotal factors influencing Tesla's (NASDAQ:TSLA) stock, emphasizing an improved outlook tempered by lingering uncertainties.

Among the key swing factors, new vehicle deliveries feature prominently. Despite management's optimistic remarks, Wolfe Research projects 2024 deliveries to dip compared to 2023, estimating around 1.75 million units or a -2% year-over-year decline. The firm extrapolates a run-rate of 1.55 million units based on Q1 deliveries, with anticipated seasonal boosts of approximately 65,000 units, particularly in China and North America.


Cost reductions also play a critical role. The investment firm acknowledges Tesla's effective execution of cost-cutting measures in the first quarter.

Wolfe Research maintains expectations for a gradual Cybertruck ramp-up, forecasting 55,000 units in 2024 and 125,000 in 2025. While pricing is anticipated to remain elevated, profitability isn't expected until later in the year, with a projected production ramp to a 125,000-unit run-rate. However, long-term profitability for the Cybertruck is anticipated to lag behind Tesla's other products due to its larger battery pack and complex manufacturing process.





Operating expenses are projected to remain relatively flat in 2024 compared to the previous year, hovering around $7.8 billion. This stability is attributed to recent headcount reductions offsetting investments and operating costs linked to AI initiatives.

Despite the improved outlook from a few weeks ago, analysts caution against complete certainty, citing key areas of uncertainty. They highlight rising take rates, the expansion of Full Self-Driving (FSD) deployment in new markets like Europe and China, and the initial rollout of robotaxi services as crucial proof-points for Tesla's trajectory. 

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