Tesla’s stock price experienced a significant surge of over 10% on Wednesday morning after CEO Elon Musk announced the company’s plans to initiate production of new, more affordable electric vehicle (EV) models by the beginning of 2025. Musk’s statement was made during Tesla’s earnings call on Tuesday, following the company’s release of underwhelming first-quarter results. Revenue declined by 9% year-over-year, marking its steepest annual drop since 2012. The company’s previous projection was to commence production of the new EV models in the second half of 2025. Tesla’s financial report indicated adjusted earnings per share of 45 cents on $21.3 billion in revenue, falling short of analysts’ consensus estimates of 51 cents per share and $22.15 billion in revenue, according to LSEG. The revenue figure represented a decrease from the $23.3 billion reported a year prior and the $25.17 billion recorded in the preceding quarter. Analysts from Bank of America issued an investor note on Wednesday, expressing their view that Tesla’s first-quarter results and management commentary had “addressed key concerns” and “revitalized the growth narrative.” These analysts subsequently upgraded Tesla’s stock rating from neutral to buy, while maintaining their price target of $220. They also expressed positive optimism regarding Tesla’s business outlook, particularly in light of the upcoming launch of new vehicle models and the potential licensing of its driver assistance system. The analysts stated that “In the near-term the tide in news flow appears to suggest the risk to the stock is skewing more positively.” In contrast, UBS analysts maintained their neutral rating of Tesla’s stock and lowered their price target from $160 to $147, indicating their continued skepticism towards the company’s rhetoric. “Increasingly, TSLA is a play on autonomy, and while progress is being made, we are cautious on near-term viability,” they wrote in a note. “We see limited growth for current lineup and lack of clarity on what these ‘new vehicles’ could bring.” CNBC’s Michael Bloom contributed to this report.
Tesla Announces Plans for Affordable EV Models, Shares Surge
