From Morningstar:

Tesla’s earnings have sent shares tumbling after the market close on Wednesday. The company is shifting its strategy to focus on developing an affordable sport utility vehicle and cutting costs for existing vehicles. As a result, the fair value estimate for Tesla stock has been reduced to $200 per share. The forecast also indicates a slowdown in deliveries growth and lower profit margins in the near term.

The market reacted negatively to Tesla’s outlook, prompting shares to drop. Near-term expectations show that delivery growth will be significantly lower than in previous years. However, the company anticipates a rebound in deliveries growth in 2026 with the launch of its affordable vehicle. The long-term forecast also accounts for margin expansion as Tesla benefits from cost-reduction initiatives.

As a result of this strategic shift, Tesla’s delivery and profit margin dynamics are expected to change in the near and long term. The company is projecting a significant slowdown in deliveries growth in 2024 and 2025, with 10% and 6% growth, respectively. However, the introduction of the affordable vehicle by the end of 2025 could lead to a resurgence in deliveries growth in 2026, surpassing 5 million vehicles delivered by 2030.



Read more: Tesla Shares Slide on Slowdown Fears