Tesla (TSLA) is set to announce its Q2 delivery haul shortly, and by all accounts, another disappointing showing is on the way. Those hoping that sales might have improved now that Elon Musk has stepped away from his government duties to refocus on Tesla are likely to be let down. Even Tesla’s strongest supporters are bracing for bad news.
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Canaccord analyst and TSLA bull George Gianarikas, who maintained a positive stance amidst Q1’s dire showing, now concedes that the picture looks pretty grim.
“We had taken a view that the impact of Mr. Musk’s political associations could not be properly discerned in 1Q25 based on a mid-quarter Model Y production ramp,” says the analyst. “Well, we think it’s now fair to say there’s been an impact. 2Q deliveries are tracking poorly in many geographies, including Europe where hard mid-quarter data is more readily available.”
As such, Gianarikas has now lowered his 2Q25 delivery forecast from ~432,500 to ~360,000. With that buzz killer out of the way, however, Gianarikas dons his bull hat again to applaud the fact the robotaxi launch has gone ahead as Elon promised.
“It was a success,” thinks Gianarikas, “regardless of the safety driver, limited access, and a geofenced ODD (operational design domain).”
In contrast to lidar-equipped vehicles, Tesla has deployed a driverless car that relies solely on cameras and neural networks. The true challenge now lies in scaling this technology nationwide and eventually worldwide. Gianarikas remains cautious about whether Tesla’s autonomous vehicle approach can handle all weather conditions reliably and prove to be the safest option.
However, the analyst thinks Tesla’s method could turn out to be the most cost-effective when produced at scale. With just a software update, Tesla could enable around 2.8 million vehicles in the U.S., offering a significantly cheaper service that could reshape competition for companies like Uber and Lyft.
For now, the analyst estimates Tesla’s cost per mile for its Robotaxi service – assuming a 50% gross margin – is about $1.09 per mile, which could decrease to roughly $0.97 once the CyberCab is introduced. This is considerably more affordable than Uber and Lyft, which Gianarikas reckons operate at over $3.00 per mile. Plus, there’s a bonus in the fact “robodrivers don’t need (tax-free) tips.”
For Gianarikas, Tesla is essentially a bet on “scaled unsupervised FSD (full self-driving)” technology, energy storage, and robotics, one that rests on the company becoming a “vertically integrated leader in all three.”
However, for now, and likely for the foreseeable future, their profit and loss are still driven primarily by EVs.
“We need to see growth in the core business to drive material positive earnings revisions,” Gianarikas summed up. “We are keeping our price target at $303 for now as we await a full earnings report and assessment of the fundamentals.”
That target suggests TSLA stock is still about 6% overvalued, but he’s sticking with his Buy rating for now. (To watch Gianarikas’ track record, click here)
13 other analysts consider TSLA shares a Buy too, yet with an additional 12 Holds and 9 Sells, the analyst consensus rates the stock a Hold (i.e. Neutral). The average price target stands at $291.31, implying the shares will shed 8% of their value over the coming months. (See TSLA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.