From Morningstar: 2025-04-22 04:55:00

Morningstar Equity Research has set Tesla’s Fair Value Estimate at $250 with a Morningstar Rating of 3 stars and a Narrow Economic Moat Rating. The Uncertainty Rating is Very High. Reuters reported that Tesla plans to delay its lower-cost vehicle launch from mid-2025 to early 2026, causing shares to drop 4% in premarket trading on April 21. This delay could impact deliveries, which fell in 2024 and were down 13% year over year in Q1. Tesla needs the new affordable vehicle to increase deliveries as its current product lineup is near market saturation in the luxury auto segment. Lower deliveries will also affect ancillary products and services, reducing the total addressable market. Despite the delay, Morningstar maintains a $250 fair value estimate for Tesla, waiting for management’s updated plan on the April 22 earnings call before making any forecast adjustments. The affordable vehicle is expected to account for a little over 1% of 2025 deliveries. Tesla shares are viewed as fairly valued trading slightly below the fair value estimate in 3-star territory. The delay in the affordable vehicle affects 2025 and 2026 deliveries but doesn’t impact the long-term outlook, as it will still be part of Tesla’s product lineup and is expected to generate the majority of total deliveries eventually. Tesla’s robotaxi service is set to begin testing in June, accounting for $65 of the $250 fair value estimate. The author or authors do not own shares in any securities mentioned in the article.



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