American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

Why Tesla’s sales are expected to slow down in 2025

by admin January 27, 2025
January 27, 2025
Why Tesla’s sales are expected to slow down in 2025

Tesla Inc. is facing a year of mixed fortunes as Wall Street analysts predict lower vehicle sales growth while analysts shift their focus to the company’s ambitious pivot into artificial intelligence (AI).

The electric vehicle (EV) giant is expected to sell 2.07 million vehicles in 2025, according to analyst forecasts compiled by FactSet.

This would mean a 16% increase over the previous year but far below the 20-30% growth forecasted by CEO Elon Musk last October.

This marks a significant slowdown compared to Tesla’s historical growth trajectory, which averaged 40% annually in previous years.

The challenges Tesla faces are compounded by political and economic factors, including the return of Donald Trump to the White House.

Trump’s administration has signalled plans to dismantle Biden-era policies that boosted EV adoption in the US, putting Tesla and other automakers in a precarious position.

Analysts suggest that Tesla’s pivot toward AI and autonomous driving technology may offset these challenges and position the company for long-term growth.

US EV sales face headwinds amid policy uncertainty

Tesla’s expected 16% sales growth for 2025 may be overshadowed by political developments in the US.

Trump’s administration has already issued an executive order to review EV-related subsidies, including the $7,500 tax credit that has significantly supported Tesla’s domestic sales.

Analysts estimate that approximately two-thirds of Tesla’s US sales rely on these incentives. Should these subsidies be rolled back, Tesla’s cost advantage in the EV market could be eroded, putting downward pressure on future sales.

The broader US EV market experienced stagnation in 2024, with market share growing only marginally to 8% from 7.6% in 2023. High prices and a lack of affordable new models have limited consumer adoption.

Tesla’s decision to scrap plans for a $25,000 EV, previously dubbed “Model 2,” has left analysts questioning the company’s ability to attract price-sensitive buyers, particularly as competitors introduce cheaper alternatives.

International markets are no less challenging. In Europe, Tesla’s EV sales fell 13% year-on-year in 2024, with industry observers citing an ageing product lineup and intensifying competition.

Meanwhile, Tesla’s position in China, its second-largest market, remains uncertain amid geopolitical tensions and Trump’s aggressive trade policies.

AI and autonomy

While Tesla’s core vehicle business may face headwinds, analysts are increasingly bullish on the company’s AI ambitions. Musk’s vision of a fleet of autonomous robotaxis is taking shape as Tesla accelerates its investments in AI software and hardware.

Analysts believe that Tesla’s AI-driven revenue streams could soon eclipse its traditional car sales.

Tesla’s foray into AI extends beyond vehicles. The company is developing a humanoid robot, which Musk claims will become the “biggest product ever of any kind.”

Although details remain scarce, Tesla’s AI ventures are expected to unlock significant value, with analysts projecting a potential market capitalisation of $25 trillion in the long term, up from the current $1.3 trillion.

Tesla’s challenges in 2025

Tesla’s ageing portfolio of EVs remains a concern for both investors and consumers. The Cybertruck, Tesla’s first new model since the Model Y in 2020, has yet to deliver significant volume, with quarterly sales estimated between 9,000 and 12,000 units.

Although Tesla plans to revamp the Model Y this year, the absence of a truly affordable model continues to limit its market reach.

The company has hinted at a potential new model, speculated to be an affordable “Model 2.5,” which could boost Tesla’s sales in the second half of 2025.

However, analysts caution that delays in launching such a vehicle could further erode Tesla’s competitive advantage, particularly as traditional automakers and EV startups ramp up their offerings.

Earlier this month, Bank of America advised investors to reduce their exposure to Tesla, with analyst John Murphy downgrading the stock from a “buy” to “neutral.” Despite the downgrade, Murphy raised his price target for Tesla to ₹490, representing a potential upside of 19.2%.

However, Murphy did list multiple scenarios that could act as a catalyst for the stock.

He cited several factors, including the introduction of a low-cost model in the first half of 2025 and another new model in the second half, both seen as key drivers of volume growth.

Additional catalysts include the mid-2025 launch of Tesla’s robotaxi, the ramp-up of Megapack production at the Shanghai assembly plant starting in the first quarter of 2025, and updates on the adoption of Tesla’s full self-driving subscription service.

The post Why Tesla’s sales are expected to slow down in 2025 appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
2 reason why the Nasdaq 100 and S&P 500 indices are crashing
next post
Why Indian billionaires Mukesh Ambani, Gautam Adani are dragging OpenAI to court?

Related Posts

Why Lithium prices may finally stabilise in 2025...

January 13, 2025

Injective (INJ) launches on-chain AI agents to simplify...

November 20, 2024

Why Brazil’s economy is booming but its stock...

December 24, 2024

Sony and Apollo send letter expressing interest in...

May 5, 2024

Is Robinhood luring high-net-worth clients from Schwab and...

May 1, 2025

US stocks open in the green: Dow jumps...

May 10, 2025

Hims & Hers Health says it will offer...

May 24, 2024

Celsius bets on women consumers—will its stock soar?

April 1, 2025

GM reveals redesigned GMC Terrain as brand’s entry-level...

August 13, 2024

How Trump was ‘orange-pilled’ by three bitcoiners in...

August 28, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Kraft Heinz plans breakup, weighs $20 billion grocery spin-off: report

      July 13, 2025
    • Trump’s 50% tariff on Brazil imports to brew trouble for Starbucks and Dutch Bros

      July 13, 2025
    • US to announce 30% tariff on EU and Mexico says Trump

      July 13, 2025
    • Why India is rushing to build bigger banks and what’s standing in the way

      July 13, 2025
    • Wall Street braces for weakest earnings season since 2023 amid market highs

      July 13, 2025

    Categories

    • Business (3,388)
    • Investing (2,615)
    • Latest News (2,017)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved