Tesla Inc. TSLA is reportedly aiming to produce 2.77 million vehicles by 2025, a 50% increase from its 2023 production. This ambitious target includes the launch of new affordable models, according to Future Fund Managing Partner Gary Black.
What Happened: Black, a prominent Tesla analyst, shared this insight on social media platform X on Sunday. He also noted that the company’s current installed capacity stands at 2.35 million units, which includes the new affordable Tesla vehicles set for delivery in the first half of 2025.
Tesla’s management has indicated a “current expected maximum capacity of close to 3 million vehicles,” including the new affordable models, which will be produced on the same manufacturing lines as the current vehicle lineup.
Black also suggested that the market is underestimating Tesla’s Total Addressable Market (TAM) expansion into the $30,000 segment. The Street is currently expecting 2025 deliveries of just 2.07 million and 2025 production of 2.073 million.
“As we saw with the introduction of Model Y in 2020, there is little cannibalization of other models when Tesla enters a new category – here the $30K affordable luxury segment,” Black wrote.
Why It Matters: Tesla’s ambitious production targets come amid a series of significant developments for the company. Last week, Tesla’s second-quarter earnings were scrutinized by Black, who criticized the lack of analytical rigor and strategic direction. Black called for a clearer strategy on margin stabilization, marketing, and the rollout of Full Self-Driving features.
Earlier in July, Tesla reported second-quarter deliveries that exceeded expectations despite a decline from the previous year. This positive reaction from the market highlighted the company’s resilience. However, some experts had predicted lower deliveries than analysts’ expectations, citing concerns about the recovery in China.
Additionally, Tesla’s second-quarter earnings report revealed a revenue beat but an EPS miss, with the company noting that its 2024 growth rate would be notably lower than in 2023.
Price Action: Tesla stock closed at $219.80, down 0.20% today. In after-hours trading, the stock rose 0.43%. Year to date, Tesla’s stock has decreased by $28.62, or 11.52%, according to data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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