RBC: Wider adoption of FSD to lead to higher margins.
Patrick Pleul/POOL/AFP
Although Tesla’s latest deliveries numbers disappointed earlier this month, RBC is gearing for deliveries to be a bright spot for the EV maker in 2025. The introduction of affordable models in the first half of the year will help deliveries create a $2.7 billion boost to gross profits, though lower pricing will create a billion-dollar offset.
More immediate catalysts revolve around Tesla’s achievements in autonomy.
“While we do think the new administration could help with federal deregulation of self-driving vehicles, ultimately, the success of Tesla’s autonomy ambitions, especially as it relates to robotaxis, will come from how well [full-self driving] develops,” the bank wrote.
Wider adoption of FSD would lead to higher margins in the near term. This isn’t impossible, and could happen with help from price cuts, RBC said.
RBC has an “outperform” rating on Tesla stock and a price target of $440, about 12% above current levels.
