$Tesla Motors(TSLA)$ π¨π°ποΈπ¨π°ποΈπ¨π°
RBC & BARCLAYS COMMENT ON TESLA, EV TAX CREDIT & FSD REGULATION $TSLA
RBC: "As we discussed last week, federal deregulation on autonomous vehicles would be a positive for Tesla shares. Robotaxis account for 44% of our valuation. We also think this has implications for FSD, which we believe will ultimately reach Level 4 status. Federal deregulation would help here as well. FSD accounts for another 33% of our valuation and we see private AVs becoming living rooms, bedrooms and offices on wheels. These will also be purpose built vehicles.
While we do see federal deregulation on AVs as a positive for Tesla, the company still has a ways to go to prove that its camera based system will ultimately work with limited interventions. As we understand it, FSD's next version (13.0) is tracking at ~10k miles before intervention, compared to Waymo's 17k level. Moreover, in states like California, getting robotaxi licenses might mandate using lidar systems. It is unclear to us if creating a federal AV policy framework would supersede. We still believe that last week's press surrounding the new administration's proposed attempts to eliminate the $7,500 credit for new EV purchases would be a net negative to Tesla. Management did say in its Q3 result call that it would be a net positive given that Tesla has a cost advantage over other EV makers.
While this later point might be true, we think Tesla's real competition is not other EV makers, especially in the US where EV penetration is still in the single digit percentages. Rather, competition is ICEs and IRA federal credits are an important aid to re-accelerate EV demand which has stalled in recent months. All that said, given that autonomy is a much bigger driver of valuation versus cars, we think federal deregulation on AVs would be a bigger positive than eliminating the $7,500 credit would be."
BARCLAYS: "The expected removal of US EV purchase credits may pressure Teslaβs US vehicle sales β albeit this likely wonβt occur until 2026 at the earliest.
In the meantime, Tesla could benefit from a 'pre-buy' next year as buyers look to capitalize on the EV credit while itβs still intact. And while the removal of the EV credit is negative for future sales, Tesla potentially can benefit through share consolidation, as it is the only OEM profitably selling EVs in the US.
Yet the larger shift for Tesla is around the secular narrative. Tesla arguably has its most powerful narrative since 2021/early 2022, when the industry was in a period of peak EV euphoria."
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Comments
The recent movement in Tesla's stock price can be attributed to several factors. Here are the key points from the news articles:
Federal Deregulation on Autonomous Vehicles: RBC analysts believe that federal deregulation on autonomous vehicles would be positive for Tesla. They estimate that robotaxis account for 44% of Tesla's valuation, and further deregulation could benefit Tesla's Full Self-Driving (FSD) technology, which accounts for another 33% of its valuation. However, the analysts mention that Tesla still needs to prove the effectiveness of its camera-based system compared to competitors like Waymo.
Potential Federal Framework for Autonomous Vehicles: Bloomberg reported that the Trump administration plans to establish a federal framework for fully autonomous vehicles. This news suggests that current federal regulations hindering Tesla's autonomous driving ambitions could be eased. Tesla CEO Elon Musk has made significant investments in autonomous driving and aims to deploy cars without steering wheels or pedals. The potential regulatory changes could remove barriers and benefit Tesla's plans.
End of Electric Vehicle (EV) Tax Credit: Reports surfaced suggesting that the incoming Trump administration intends to end the $7,500 tax credit for electric vehicles. While the removal of the tax credit may negatively impact Tesla's future sales, Barclays analysts note that Tesla is currently the only profitable electric vehicle manufacturer in the US. They expect a "pre-buy" phenomenon next year as buyers rush to capitalize on the credit before it is discontinued.
Overall, these developments regarding federal regulation on autonomous vehicles and the potential end of the EV tax credit have influenced market sentiment towards Tesla.
Please note that the movement in Tesla's stock price could also be influenced by factors such as stock capital flow. It is important to consider multiple factors and conduct thorough analysis before making any investment decisions.
Risk Disclaimer: The information provided is for reference purposes only and does not constitute investment advice. The content is based on the analysis of publicly available information and should not be interpreted as an endorsement or recommendation to buy or sell securities.