Tesla to increase incentives to achieve 20-30% volume growth target: DB

Investing.com -- Tesla's efforts to meet its ambitious delivery goals for 2025 may include ramping up incentives, according to Deutsche Bank (ETR:DBKGn ) analysts in a note Friday.

The automaker announced it delivered 496,000 vehicles in Q4 2024, falling short of Deutsche Bank's tracker of approximately 500,000 units and below consensus expectations of 507,000 units. 

For the year, Tesla (NASDAQ:TSLA ) delivered 1.79 million vehicles, a 1.1% year-over-year decline, missing its prior growth targets.

Geographically, Deutsche Bank noted weakness in Europe, while deliveries in China and North America met expectations. 

Model-specific data revealed 472,000 Model 3 and Model Y deliveries, slightly under Deutsche Bank’s 475,000 forecast. The combined Model S, Model X, and Cybertruck deliveries came in at 23,600, below the anticipated 25,000 units.

Looking ahead to 2025, Deutsche Bank analysts expect Tesla to prioritize delivery volume over auto gross margins to achieve a 20-30% growth target.

 “This means in order to achieve 20-30% volume growth, we could see incentives increase (e.g., financing, free charging, free FSD, etc…) and pricing on new models come in more aggressive,” the bank states. 

The urgency to implement these measures could intensify if U.S. tax credits are reduced or removed, according to the bank.

On the energy side, Tesla deployed 11 GWh of energy storage in Q4, surpassing Deutsche Bank's estimate of 9.5 GWh.

Deutsche Bank adds that the higher-than-expected energy contribution, which carries better margins, may partially cushion overall gross margins despite the auto segment's potential margin pressures.

 

Source: Investing.com