Tesla shares rise on Musk promise to launch cheaper EVs, autonomous vehicle

Tesla shares rose over two per cent after Elon Musk announced plans for affordable models and an autonomous ride-hailing service. Despite a weak fourt
...
Tesla shares
Promises made during the Tesla earnings call have made investors overlook a weak Q4 that brought lower profit margins, a drop in revenue amid rising competition. (Bloomberg)
Tesla shares
Promises made during the Tesla earnings call have made investors overlook a weak Q4 that brought lower profit margins, a drop in revenue amid rising competition.

Tesla shares gained more than two per cent on Thursday after CEO Elon Musk vowed to launch long-awaited cheaper models in the first half of 2025 and start testing an autonomous ride-hailing service in June.

The promises helped investors overlook a weak fourth quarter that saw margin shrink and revenue drop below expectations as a result of slow model upgrades and rising competition.

Doubts over Tesla's auto business gained ground after it ended 2024 with its first annual decline in deliveries, despite margin-sapping cheaper financing options and price cuts.

Also check these Cars

Find more Cars
Tesla Model S (HT Auto photo)
UPCOMING
BatteryCapacity Icon100 kWh Range Icon570 km
₹70 Lakhs - 1 Cr
Alert Me When Launched
Tesla Model 3 (HT Auto photo)
UPCOMING
BatteryCapacity Icon82 kWh Range Icon 555 km
₹ 40 Lakhs
Alert Me When Launched
Lexus Es (HT Auto photo)
Engine Icon2487 cc FuelType IconMultiple
₹ 64 Lakhs
Compare
View Offers
Bmw I4 (HT Auto photo)
BatteryCapacity Icon83.9 kWh Range Icon590 km
₹ 72.50 Lakhs
Compare
View Offers
Hyundai Ioniq 6 (HT Auto photo)
UPCOMING
BatteryCapacity Icon77.4 kWh Range Icon631 km
₹ 65 Lakhs
Alert Me When Launched
Mahindra Be 6 (HT Auto photo)
BatteryCapacity Icon79 kWh Range Icon682 km
₹ 18.90 Lakhs
Compare
View Offers

Tesla said on Wednesday it expected the vehicle business to return to growth this year, but did not repeat Musk's prediction from late last year that sales would grow 20 per cent to 30 per cent in 2025.

"The results are emblematic of a company in the transition from an automotive 'pure play' to a highly diversified play on AI and robotics," Morgan Stanley analysts said.

Tesla shares have rallied recently on hopes that US President Donald Trump, whose election campaign Musk had backed with around a quarter-billion dollars in donations, would provide a clearer regulatory path for its robotaxis.

Musk said Tesla would start unsupervised tests of its autonomous ride-hailing service in Austin, Texas. He did not provide details either on how the service would work or his affordable vehicle plans, including pricing.

Also Read : Tesla to launch budget-friendly EVs in 2025, Musk plans paid self-driving service

Tesla was set to add roughly $28 billion to its market value, if gains hold. The stock ended last year with a gain 62.5 per cent and trades at 118 times its 12-month forward earnings estimates, compared with Ford's 6.07, and GM's 4.48.

At least 19 brokerages have raised their target price for the stock, with a median PT of $300 compared with $278 at the end of December.

"Tesla investors are fuelled by optimism around Full Self-Driving and the upcoming affordable model - two key catalysts that could drive Tesla's next leg of growth," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

While Tesla's plan to test its robotaxi is a positive, some analysts questioned the timeline given by Musk due to heavy regulatory scrutiny.

"He (Musk) highlighted improvements in Tesla's software, with planned rollouts in Texas and California, though regulatory barriers in Europe and data restrictions in China continue to slow progress," said Mamta Valechha, consumer discretionary analyst at Quilter Cheviot.

Tesla on Thursday also raised its capital expenditure forecast to exceed $11 billion this year and in the next two fiscal years.

Check out Upcoming EV Cars in India.

First Published Date: 01 Feb 2025, 09:38 AM IST
NEXT ARTICLE BEGINS

Check Latest Offers

Please provide your details to get Personalized Offers

Choose city
+91 | Choose city
Choose city
Select a dealer

Want to get the best price for your existing car?

Powered by: Spinny Logo
By clicking "View Offers" you Agree to our Terms and Privacy Policy
Dear Name

Please verify your mobile number.

+91 | Choose city
Couldn't verify the OTP.
It's either expired or it's incorrect.