Potential critical catalyst for Tesla shares with FSD price cuts boosting subscriptions and margins

From Investing.com: 2024-08-07 20:42:06

Tesla Inc saw an increase in full self-driving software subscriptions in Q2, following price cuts and promotional offers. Despite a 60% jump in miles driven under the FSD software, penetration in Tesla’s fleet remains low. RBC analysts believe a further price cut could significantly boost FSD subscriptions and improve margins.

RBC lowered Tesla’s price target to $224 from $227, citing weaker delivery growth forecasts for 2025. The EV maker struggled with disappointing earnings and deliveries in Q2 due to softer margins, rising competition, and production disruptions. CEO Elon Musk believes FSD and robotaxis could be major revenue sources, although their rollout has faced delays.

RBC expects Tesla’s energy storage revenues to increase, along with benefits from higher regulatory credits. The stock has dropped nearly 23% this year, as falling deliveries and margin pressures from price cuts and Chinese competition have impacted Tesla’s performance. Eagerly awaited FSD advancements hold potential for the company.



Read more at Investing.com: FSD price cuts could be ‘critical catalyst’ for shares, RBC says By Investing.com