Tesla Stock Eyes All-Time Highs as Post-Election Rally Continues

Tesla stock (NYSE: TSLA) rose to its 52-week high earlier this week and is now only a tad short of its all-time high that it hit in November 2021. The stock rose 38% in November and had their best month in almost two years which helped Tesla add over $300 billion to its market cap, the highest for any company in that month.

The rise in Tesla stock after Donald Trump’s election is not all that hard to comprehend. The company’s CEO Elon Musk was among the biggest backers of Trump and the president-elect has obliged him along with former Republican presidential candidate Vivek Ramaswamy to lead the Department of Government Efficiency (DOGE). Among others, DOGE has the mandate to advise the President on cutting “excess” regulations.

Tesla Stock Has Rallied Since Trump’s Election

Notably, several analysts have raised Tesla’s target price since Trump’s election with Wedbush’s Dan Ives raising his to a Street-high of $400. “We believe the Trump White House win will be a gamechanger for the autonomous and AI story for Tesla and Musk over the coming years,” said Ives in his report.

He added, “Now the next step in this broader Tesla strategic vision begins which is the autonomous and AI era as we believe Tesla remains the most undervalued AI play in the market today.”

Many analysts expect easier self-driving regulations under a Trump presidency which would benefit Tesla.

Tesla Expects Cybercab Deliveries in 2025

At the “We, Robot” event in October, Tesla unveiled its robotaxi or the Cybercab which happens to be the first product that the Elon Musk-run company has unveiled since Q4 2019 when it unveiled the Cybertruck pickup whose deliveries began in November last year after much delays.

The Cybercab is a low two-seater and has no steering wheels or pedals. The company also revealed that it would produce a bigger vehicle named Cybervan which would have the capacity to carry upto 20 people.

The success of Cybercab would rely on Tesla’s autonomous driving software. Notably, Musk believes that the bulk of Tesla’s valuation comes from the company’s autonomous driving business.

For nearly a decade now, Musk has been promising full self-driving almost every year. Last year, he said that he would be “disappointed” if the company did not hit the milestone by the end of this year – which it eventually did not.

While Tesla has missed several self-imposed deadlines for full autonomy, Musk is quite categorical that it’s an aim that Tesla continues to strive for. “If somebody doesn’t believe Tesla’s going to solve autonomy, I think they should not be an investor in the company,” said the billionaire during the Q1 2024 earnings call earlier this year.

Optimus Could Be a Key Long-Term Driver for Tesla

At the “We, Robot” event, Tesla showcased the abilities of its Optimus humanoid. Musk said that the humanoid is doing some unspecified tasks in Tesla’s factory and the company should be able to sell it externally by the end of 2025.

“Optimus will be more valuable than everything else combined because if you’ve got a sentient humanoid robot that is able to navigate reality and do tasks at request, there is no meaningful limit to the size of the economy,” said Musk at the event.

Notably, Citi expects humanoids to become a $7 trillion market over the next 25 years. At the shareholder meeting earlier this year, Musk said that Optimus humanoid could make Tesla a $25 trillion company, a milestone no company has come anywhere closer to.

Here it’s worth noting that while the humanoid impressed with all the tasks it could do, it wasn’t all technology but these were being remote-controlled. Meanwhile, while Tesla has been making strides in AI products, its core automotive business has looked weak in 2024.

Tesla’s Deliveries Fell YoY in the First Nine Months of 2024

Tesla’s deliveries fell YoY in the first two quarters of the year and while they did rise in Q3, its cumulative deliveries in the first nine months of the year are still lower than the corresponding period last year.

During the Q3 earnings call, Tesla reassured markets about its 2024 delivery outlook and emphasized, “Despite ongoing macroeconomic conditions, we expect to achieve slight growth in vehicle deliveries in 2024.” To grow its deliveries YoY in 2024, the company would need to deliver around 515,000 cars in the fourth quarter.

However, Goldman Sachs analyst Mark Delaney believes that Tesla’s Q4 deliveries would be around 510,000. Guggenheim analyst Ronald Jewsikow is even more pessimistic and sees the number at 491,000. “Nothing we are seeing in the data supports 500,000-plus deliveries in Q4,” he said in his note.

Musk Expects Deliveries To Rise Sharply in 2025

Meanwhile, during the earnings call, Musk was quite upbeat on the 2025 delivery outlook and said, “Something like 20% to 30% growth next year is my best guess.” While that guidance at the midpoint is half of the 50% long-term delivery guidance that Musk once touted, it is nonetheless encouraging considering the current state of the EV industry. It however remains to be seen whether the company’s deliveries can rise as much as Musk touted during the earnings call.

Notably, while Tesla’s guidance implies 2025 deliveries of around 2.3 million, consensus estimates call for deliveries of only about 2.1 million.

Even CFRA, which rates Tesla as a “buy” believes that the company won’t be able to meet its 2025 guidance. In its note, the brokerage said, “While we think Cybertruck production will increase materially, the growth might not be as robust as many are expecting given the uniqueness of the vehicle, and we see Model 3 and Y sales growth continuing to moderate.”

Bank of America however raised Tesla’s target price from $350 to $400. “We visited TSLA’s gigafactory in Austin, TX, which included meeting with IR, a factory tour and a ride & drive session. The trip gave us increased confidence that TSLA is well-positioned to grow in 2025+ with its core EV business and launch of its robotaxi offering, and longer-term from its investments in Optimus,” it said in its note.