On Monday, TSLA stock briefly hit $404.19 per share, closing in on Tesla’s all-time high price of $409.97 in November 2021. Expectedly, Tesla (NASDAQ:TSLA) stock rallies from largely negative returns throughout the year. Over the last 30 days, TSLA shares went up 15.37% to the price of $403.81 per share (based on the time of writing).
Contrasted to the 52-week average of $218 per share, TSLA stock is now up 75%. Elon Musk’s active support of President-elect Donald Trump during the campaign and his Department of Government Efficiency (DOGE) initiative combine well with the expected tariff-driven Trump admin.
Such a combo is poised to boost Tesla’s bottom line against cheap Chinese EV automakers while also lessening the lawfare potential from federal government agencies against Musk’s many holdings. But does that mean TSLA stock should exceed the previous ATH price in 2025?
Drivers Behind Tesla Stock Moves in 2024
Since Q4 2023, Tesla has given investors negative earnings per share (EPS) surprises. This changed with Q3 2024, having delivered a 34.78% positive surprise of $0.62 reported vs $0.46 forecasted EPS. At the year’s lowest point in April, TSLA stock was suppressed to $138.80 per share.
Yet, that didn’t last long amid expectations of new tariffs. For many investors, this was a buy-the-dip opportunity. Mid-may, the Biden admin indeed quadrupled tariffs against Chinese EV automakers.
This continued with a double-digit rally in June after shareholders voted to once again approve the $44.9 billion compensation package to Elon Musk. Initially, it was estimated at $56 billion, the largest pay in US corporate history, but it dropped in value as TSLA stock took a hit.
Last Monday, Delaware Judge Kathaleen McCormick once again denied the pay package to Elon Musk from the 2018 shareholder-approved plan. Although it is unlikely that the Delaware Supreme Court will overturn the ruling, the doubling of TSLA stock price would entail over $100 billion Musk package if there were to be a new one.
At present, 46% of TSLA shares is held by institutions. Vanguard Group, Blackrock (NYSE:BLK) and State Street Corp (NYSE:STT) hold the largest stakes, well above 100 million shares each. Elon Musk is the largest individual holder of 411 million TSLA shares, giving him a 13% Tesla stake.
Tesla FSD as Primary Valuation Booster
First announced in October 2014, Tesla’s full-self driving (FSD) feature has been in a limbo zone. Marketing-wise, it was introduced as an autopilot with the Model S, but one that is work in progress. In 2019’s Tesla Autonomy Day presentation, Elon Musk projected over a million cars with FSD hardware by mid-2020.
Four years later, the most advanced FSD version is Hardware 4 (HW4), present in refreshed Model 3, Model S, Model X, and Model Y. A decade later since the FSD announcement, it appears that Tesla FSD (version 13) has matured to a level of robust performance, according to some reviews.
In the first three quarters of 2024, Tesla manufactured 1.3 million EVs. The National Highway Traffic Safety Administration (NHTSA) has been the main feedback provider for Tesla’s FSD development. On October 17th, the agency opened a probe into FSD Collisions in Reduced Roadway Visibility Conditions. The ongoing investigation covers around 2.4 million Tesla EVs with FSD-capable hardware.
However, if the latest positive feedback from users themselves is an indicator, 2025 could be the year when robotaxis finally roll out as “first operational”. From the initial estimate of $200k per robotaxi, such a Cybercab would be priced under $30k on the back of the Model 2, tracking the similar price level of Baidu’s robotaxis.
If regulatory approvals are favorable, 2026 could be the first year in which investors start thinking of Tesla as a robotaxi company. In turn, the transformation from a low profit margin car company, to a transportation platform with steady cashflows from the ride-hailing market, could easily push Tesla market cap over $2 trillion.
Although speculative, it remains the case that Tesla accumulated the most FSD driving data while retaining a third of global EV market share, together with Chinese BYD (SZ:002594). To solidify its position and not get outpaced by Waymo, 2025 is the year when Elon Musk’s promises have to materialize.
TSLA Stock Price Expectations
After breaching the multi-year high of $404.19, many investors decided to cash in with stock down around 3% earlier in the morning. But nearing Tuesday's close,TSLA stock is up around 3%. According to 32 analyst inputs aggregated by Nasdaq, the median TSLA price target is $251.1 per share. The high estimate is close at $411, in line with the previous ATH price in 2021.
Naysayers for Tesla’s entire business model, against cheap Chinese EVs, have tilted the bottom TSLA price forecast at just $24.86 per share. Tesla’s next earnings report is expected on January 22nd, 2025, with a consensus EPS forecast of $0.65 vs the $0.57 reported in the year-ago quarter.
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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.