Tesla stock: Goldman lowers numbers on production and market headwinds

Goldman Sachs analysts headed by Mark Delaney reduced their estimates on Tesla (NASDAQ:TSLA) stock citing both production and market headwinds.

Per data from CPCA and Motor Intelligence, delivery estimates in key regions have seen a high single-digit year-over-year increase but a low double-digit decline quarter-over-quarter in the first two months of the quarter, Goldman noted.

Although these figures, particularly for the US, are preliminary and subject to final confirmation, analysts believe the data indicates that volumes “are tracking lower” compared to their earlier forecast of 475,000 deliveries, which predicted a 12% increase year-over-year and a 2% decrease quarter-over-quarter.

“We now model 1Q volumes at 435K and 2024 vehicle deliveries at 1.98 mn (+9.5% yoy) compared to 475K/2.08 mn prior,” they said.

While the monthly data is still preliminary, there are other indicators pointing to waning sales.

Those include a sequential decline in Tesla app downloads in the US and Europe when comparing 1Q24 to 4Q23, and a year-over-year decrease compared to 1Q23, according to Sensor Tower data. Moreover, exports from the company’s China factory showed a decrease in January and February compared to the previous year, analysts highlighted.

Lastly, the EV maker’s strategy of reducing end-of-quarter delivery surges could lead to a smaller increase in quarterly figures, Delaney and his team cautioned.

Growth is being influenced by both production challenges and market dynamics.

“On the production front, we believe the pace of the new Model 3 ramp in the US has been relatively muted in 1Q given still long lead times shown on Tesla’s US website and lower volumes.”

Furthermore, Tesla's Berlin plant experienced downtime in January, attributed to the Red Sea conflict, and in March due to a power outage. Reduced EV subsidies in Europe, increased competition in China, and slower-than-anticipated demand are also factors impacting Tesla stock performance, added analysts.

Goldman revised 2025 and 2026 delivery estimates down to 2.35 million and 2.75 million, respectively, from 2.53 million and 3.00 million.

In addition, EPS forecasts, including SBC, are adjusted to $2.15, $3.80, and $5.00 for 2024-2026, mainly due to fewer car deliveries and lower revenue. EPS forecasts excluding SBC are now set at $2.70, $4.40, and $5.60.

Analysts believe Tesla stock remains well-positioned for long-term growth “given its strong position in the EV and clean energy markets.”

They reduced their 12-month target price on Tesla stock to $190 from $220.