Investing.com -- Deutsche Bank has lowered its price target for Tesla (NASDAQ:TSLA), citing a "major reset" of its auto volume expectations.
This revision comes ahead of the company’s 1Q25 deliveries, with weaker demand trends and a slower rollout of the Model Q, Tesla’s cheaper variant of the Model Y, playing a significant role in the adjustment.
For 1Q25, Deutsche Bank (ETR:DBKGn) forecasts deliveries of 340,000 to 350,000 vehicles, a sharp drop from the prior consensus estimate of 378,000.
The new target represents an 11% year-over-year decline and a 30% quarter-over-quarter decrease.
This would be the lowest level of deliveries since Q3 2022. “The main drivers of the downside are weakness in Europe and the Model Y Juniper changeover,” said Deutsche Bank analysts.
Deutsche Bank has also revised its full-year outlook, now modeling a 5% year-over-year decline in deliveries, bringing the total to approximately 1.7 million vehicles.
The delay in the Model Q rollout, which is expected to begin in the U.S. before expanding to Europe and China, further exacerbates these challenges.
The bank states that the decline in Tesla’s European market is particularly pronounced, with registrations dropping more than 40% year-over-year in January and February.
While there has been some recovery in China, with Model 3 sales up 52%, the overall performance is said to remain under pressure, especially in the Model Y segment.
Despite these setbacks, Deutsche Bank maintains a Buy rating on Tesla, although it has lowered its price target to $345 from $420, reflecting the revised volume expectations.
The analysts noted, “As we have seen over the years, rarely anything at Tesla happens in a straight line.”