Tesla Stock To Pull Back Below $350 Following First-Ever Annual Delivery Decline? Here’s What Stocktwits Users Predict

Tesla, Inc. ($TSLA) stock experienced its biggest one-day price decline since Dec. 18, on Thursday after the Elon Musk-led electric vehicle (EV) maker reported its first-ever annual decline in sales.

The company’s fourth-quarter deliveries of 495,570 units, though increasing 2.17% year over year (YoY) and 7.06% quarter over quarter, trailed the consensus of 504,800 units and the whisper number of 500,000 units.

China’s BYD Company Limited ($BYDDY) ($BYDDF) has wrested the EV crown back from Tesla as it sold 595,413 battery EVs during the quarter.

Annually, Tesla sold 1,789,226 vehicles in 2024, down 1.07% from the 1,808,581 units reported for the previous year. The annual number, however, trumped BYD’s 1,764,992 units.

Bulls Shrug Off Miss

Tesla bull and Wedbush analyst Daniel Ives said that, overall, he would characterize the number as “respectable.” 

Morgan Stanley’s Adam Jonas said that to keep the annual growth streak going, the company would have had to report fourth-quarter deliveries of at least 514,900 units. That said, the actual quarterly number still was a record, he noted. 

Jonas attributed the weakness to a relatively aged product and the increased availability of lower-priced competition globally ahead of the hyped introduction of the cheaper model, codenamed Juniper. This is despite the pre-buy and promotional forces, he said.

The Morgan Stanley analyst noted that Tesla delivered 36,000 more units than it produced in the quarter, resulting in a six to seven day reduction in days’ supply of inventory on a full calendar day basis. 

An estimated average transaction pricing of $45,000 per unit drives a $1.6 billion working capital inflow during the quarter, in line with the firm’s forecast, he added.

Fund manager Gary Black said the fourth-quarter miss was mainly due to Model S and X EVs and Cybertrucks, as aggregate sales of these vehicles came in at 23,600 versus the consensus of 31,800.

Goldman Sachs, which has a ‘Neutral’ rating for Tesla stock, said China sales growth was offset by weakness in Europe, TheFly reported. 

Energy Storage Powers Up

Jonas noted that energy storage deployments beat expectations by 15%, with quarterly storage deployments at 11 Gigawatt-hour (GWh). Annual deployments have now grown 113% YoY, he said

Looking Ahead

Wedbush’s Ives said the Street will now focus on Tesla’s ability to accelerate delivery growth to 20%-30% in 2025. He expects the company’s volume to get a shot in the arm from the launch of its lower-priced EV in early 2025.

“The next step in this broader Tesla strategic vision begins is the autonomous and AI era which will be accelerated under a Trump White House,” he said.

“The laser focus for Tesla is the 2025 reaccelerated delivery growth story and FSD penetration with autonomous the grand vision for Musk & Co.”

Goldman lowered its 2025 earnings per share (EPS) estimate for 2025 to $2.80 from $2.85 and delivery estimate to 2.01 million from $2.03 million units. However, the firm is optimistic about longer-term growth premised on a growing software and services business.

Tesla Stock

The EV maker’s stock ended 2024 with a gain of 62.5%. Following the delivery miss, the stock shed 6.08% before ending at $379.28, losing roughly $79 billion in market capitalization in a single day. This shaved off $17.7 billion from the net worth of Musk, who happens to be the world’s richest man.

The stock is now at its lowest level since Dec. 9.

TSLA 1-year chart courtesy of TradingView

The next major catalyst for the stock is Tesla’s earnings report scheduled after the market closes on Jan. 29.  Analysts, on average, expect the company to report EPS of $0.76 and revenue of $27.37 billion.

If the stock reverses course on Friday, it could try to backfill and go past the $400 level, but if the weakness continues, a pullback toward the $350-$360 zone is likely.  The 14-day relative strength index is in neutral territory (45.22) following the sell-off seen since late December.

TSLA sentiment and message volume January 2, 2025, as of 10:18 pm ET | Source: Stocktwits

On Stocktwits, retail sentiment toward Tesla stock stayed ‘neutral’ (47/100), although retail chatter grew louder to ‘high’ levels amid the sales release.

A Stocktwits poll soliciting opinions about Tesla stock trajectory showed that 38% of the respondents expect it to close below $350 on Friday. About 22% each predicted a move to $350-$375 and above $400, while19% looked at a $375-$400 range.

Morgan Stanley rates Tesla stock an ‘Overweight’ and has a $400 price target, while Wedbush rates it an ‘Outperform’ and has a $515 price target.

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