Is Tesla Stock a Buy, Sell, or Hold on Ride-Hailing Push in California?
Tesla (TSLA) shareholders are increasingly concerned that CEO Elon Musk's attention is being diverted from the electric vehicle company's core operations. And their worries may not be unfounded.
The Musk-led company reported a yearly decline in vehicle deliveries in 2024 for the first time ever. Tesla sold 1.79 million vehicles in 2024, down 1.1% from 2023. Moreover, even the 2% boost in Q4 deliveries to 495,570 vehicles was modest, and projections from analysts at FactSet indicate that Tesla's average vehicle sales price is expected to decline to slightly above $41,000 for the quarter. Adding to the misery, Tesla sales in Europe fell by 45% from the previous year.
This has all led to the company's stock correcting by more than 32% on a year-to-date basis, valuing it at a market cap of $915.6 billion.
So, to stop his decline, Tesla is looking to diversify its revenue sources. And its latest efforts include a ramp-up of its ride-hailing bet.
Tesla Makes a Ride-Hailing Bet
According to a recent Bloomberg report, Tesla has submitted an application to the California Public Utilities Commission for a transportation charter-party carrier permit, which would grant the company the ability to own and operate its fleet of vehicles. This move positions Tesla as a direct competitor to established ride-hailing services such as Uber (UBER) and Lyft (LYFT), as well as to Google's (GOOGL) Waymo, which also operates a robotaxi fleet.
Previously, Musk stated that Tesla intended to launch its driverless ride-hailing service in Austin by June, with plans to expand to California before year-end, although he did not provide further specifics.
The ride-hailing market is a lucrative one that is expected to grow further in the coming years. In 2023, revenue from ride-hailing services in the United States reached approximately $52 billion. This figure is projected to increase to around $61 billion by 2029, indicating a steady upward trend. The number of ride-hailing users in the United States is anticipated to reach 99.94 million by 2029.
So, is Tesla's ride-hailing bet enough to warrant an investment? Let's have a closer look.
Steady Financials
Even after missing revenue and earning estimates in Q4, Tesla reported growth. Its revenue moved up by 2% from the prior year to $25.71 billion, and its earnings increased by 3% in the same period to $0.73, missing the consensus estimate of $0.75.
Although the decline in vehicle deliveries was a disappointment, growth in some other key metrics was positive. Tesla reported a 17% and 19% year-over-year rise in charging stations and connectors to 6,975 and 65,495, respectively.
Net cash from operating activities came in at $4.8 billion, higher than the previous year's figure of $4.4 billion with a marginal decline in free cash flow to $2.03 billion. Overall, Tesla ended the year with a hefty cash balance of $36.6 billion, much higher than its short-term debt levels of $14.9 billion.
Encouraging Developments But….
Beyond its core vehicle manufacturing business, Tesla's high-margin services and energy divisions are playing an increasingly vital role in its financial performance. The company continues to expand its energy operations on a global scale, focusing on solar solutions and Megapack deployments. To support this growth, Tesla has established new production sites in Texas and Shanghai. The Texas facility, in particular, houses a 50,000-GPU compute cluster aimed at optimizing costs and reducing dependence on third-party computing services. This in-house infrastructure will accelerate advancements in Tesla's Full Self-Driving (FSD) technology, aid the development of its Optimus humanoid robot, and further integrate the company's hardware and software ecosystem.
At the same time, Tesla's Shanghai-based battery plant has officially begun operations, adding further momentum to the company's energy business. This segment holds immense potential, as demonstrated by products like the Megapack 2 XL, which boasts an energy storage capacity of up to 3.9 megawatt-hours and an inverter output exceeding 1.9 megawatts. To put this into perspective, a single Megapack 2 XL can power approximately 3,600 homes for an hour or fully recharge 65 Model 3 vehicles.
Tesla's progress in robotics is also advancing at a rapid pace. The company's humanoid robot, Optimus, is already deployed in Tesla's own factories and is being refined using a data-driven learning model akin to FSD. This positions Tesla at the forefront of autonomous robotics, with potential applications extending well beyond the automotive industry, reinforcing its leadership in AI and automation.
Despite Tesla's AI capabilities being frequently overlooked, the company is deeply committed to its artificial intelligence initiatives. The Dojo supercomputer is a prime example, utilizing AI to enhance, refine, and sustain Tesla's expansive FSD ecosystem. This integrated approach gives Tesla a significant competitive advantage, enabling it to provide a fully comprehensive autonomous driving solution rather than focusing on a single niche aspect.
However, with these ambitious projects, the company's ability to execute effectively and translate innovations into sustained profitability remains crucial. Under Musk's leadership, Tesla thrives on disruption, but consistency has often been elusive. While Musk has faced criticism for repeatedly missing product timelines, his confidence in Tesla's long-term vision continues to resonate with both supporters and skeptics alike.
Analyst Opinion on TSLA Stock
Taking all of this into account, analysts have deemed the Tesla stock a 'Hold' with a mean target price of $351.67. This denotes upside potential of about 33% from current levels. Out of 39 analysts covering the stock, 13 have a 'Strong Buy' rating, two have a 'Moderate Buy' rating, 14 have a 'Hold' rating, and 10 have a 'Strong Sell' rating.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
11 hours ago
- Globe and Mail
Why a Trump-Musk Feud Could Mean Big Wins for AST SpaceMobile
[content-module:CompanyOverview|NASDAQ:ASTS] But a five-day return of more than 38% could scare many investors off unless there's reason to believe it could be part of a longer-term rally. The major boost to ASTS stock coincided with a highly publicized dispute between President Trump and Elon Musk. Though this feud is not the sole reason ASTS shares have skyrocketed in recent weeks, it is likely the primary driver of this performance. Ultimately, much of the rally aligning with the Trump-Musk back-and-forth probably stems from speculation. Nonetheless, it reveals some critical considerations investors should make about AST SpaceMobile and the rapidly evolving landscape of space companies. Feud Casts Doubt on Starlink AST SpaceMobile has experienced striking growth in recent months, surging by nearly 262% in the last year. However, a lingering thorn in its side is Starlink, the satellite internet service provider subsidiary of Musk's aerospace company SpaceX. Starlink's threats to AST became more significant after last November's election and Musk's close relationship with Trump. Indeed, reports indicated that Starlink began to expand its reach across federal government agencies early into the new Trump administration. Investors in AST and other publicly traded competitors may have worried that Musk's partnership with Trump could result in a monopoly for Starlink. With an estimated two-thirds of internet satellites in orbit being represented by Starlink after the election, this risk appeared likely only to grow. An issue for other satellite-based providers is that there is finite orbital capacity, meaning that once a certain number of satellites are in place at particular orbits, it is difficult or impossible for others to be added. Starlink's early advantage still has the potential to crowd out other companies from getting infrastructure in place, despite AST's moves to rapidly launch a growing number of its own satellites. However, the recent rift between Musk and Trump may have threatened Starlink's advantage. Trump responded to Musk's criticism of the former's signature proposed spending bill by floating the idea of canceling federal contracts held by Musk's companies, presumably including SpaceX. Musk also signaled his willingness to pull back from prior partnerships by suggesting that SpaceX would discontinue the Dragon spacecraft previously used for International Space Station missions, although he later retracted that statement. Potential Impact for AST SpaceMobile While investor response to the public dispute arising between Musk and Trump is speculative, the boost has so far been priced into ASTS shares. This adds to a series of positive developments for AST SpaceMobile, making it an increasingly attractive prospect for many buyers. [content-module:Forecast|NASDAQ:ASTS] The firm has made significant progress in building out its infrastructure, both in terms of satellite launches over recent months and in a series of lucrative, high-profile partnerships with existing telecommunications providers. The company has also recently secured important agreements with multiple government agencies, independently of any developments related to Musk and Starlink. A coordination agreement with the U.S. National Science Foundation and a $43-million new contract award in support of the United States Space Development Agency are prime examples. Another key development for AST is its shift toward commercialization. In its first-quarter earnings, the company said it expects to activate initial cellular broadband capabilities across multiple continents in the coming quarters thanks to partnerships with telecommunications companies in the United States, Europe, and Japan. This is forecast to lead to revenue opportunities of between $50 million and $75 million in the second half of 2025. AST Remains Attractive, Despite Starlink Uncertainty Investors will likely have a hard time predicting whether a blossoming feud between Trump and Musk continues to develop or fade away, and it will be even harder to decipher the potential impacts for Starlink and its competitors. However, AST is an attractive prospect on its own, regardless of these external factors, and is worth investor attention as it continues to expand its reach into a massive addressable market. Where Should You Invest $1,000 Right Now? Before you make your next trade, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
CTV News
11 hours ago
- CTV News
Tesla upgrades its Model S and X cars in U.S., raises prices by $5,000
Tesla said on Thursday it upgraded its Model S and Model X cars in the U.S. and raised their prices by $5,000, according to the electric vehicle maker's post on X and its website. Prices were hiked for all configurations of the two models by $5,000, Tesla's website showed. The all-wheel drive version of Model X costs $89,990, while its plaid variant is priced at $104,990. The model S all-wheel drive now costs $84,990 and its plaid variant is $99,990. Model S & X are now even better – launching today in the US 🇺🇸 Highlights: – Frost Blue paint color – Up to 410 miles of range (Model S Long Range – our longest range Tesla yet) – Even quieter inside: less wind + road noise & more effective Active Noise Cancellation – New… — Tesla (@Tesla) June 13, 2025 (Reporting by Devika Nair in Bengaluru)
CTV News
13 hours ago
- CTV News
Republican enthusiasm for Musk cools after his feud with Trump
Elon Musk listens as President Donald Trump speaks during a news conference in the Oval Office of the White House, Friday, May 30, 2025, in Washington. (AP Photo/Evan Vucci) WASHINGTON — Tech billionaire Elon Musk has lost some of his luster with Republicans since his messy public falling-out with President Donald Trump last week, a new survey finds. Fewer Republicans view Trump's onetime government efficiency bulldog 'very favorably' compared with April, according to the poll from The Associated Press-NORC Center for Public Affairs Research. Though most Republicans continue to hold a positive view of Musk, their diminished fervor suggests his vocal opposition to Trump's signature spending and tax cut legislation, and Musk's subsequent online political and personal taunts, may have cost him some enthusiasm within the party. 'Some things have happened lately that have changed how I feel about him a little,' said Alabama Republican Katye Long, whose feelings for Musk have cooled to 'somewhat favorable.' 'I liked what he was doing when he was helping. But now I feel like he's kind of hurting,' said the 34-year-old automotive component factory employee and mother of three from Woodstock, Alabama. 'I also don't feel like he matters that much. He's not actually part of the government. He's just a rich guy who pushes his opinions.' Musk's overall popularity hasn't shifted, the poll found, and most of the shift among Democrats and Republicans was between 'very' and 'somewhat' strong opinions. Americans are less likely to view him favorably than his electric vehicle company, Tesla. That said, about half of Americans have a negative opinion of Tesla, highlighting another challenge for Musk when the company has dropped in value and been the target of protests in the U.S. and Europe. About one-third have a favorable view of Tesla, while about two in 10 don't know enough to say. Republicans' enthusiasm waned, but so did Democrats' antipathy Even a subtle shift in the intensity of Republicans' feelings about Musk could be important as the electric car and aerospace mogul weighs a second political act after spending about US$200 million in service of Trump's 2024 election effort. After decrying the GOP's massive tax and budget policy bill as 'a disgusting abomination,' Musk wrote on X, his social media platform, 'In November next year, we fire all politicians who betrayed the American people.' The poll suggests the messy feud with Trump may have rubbed some Republicans the wrong way, as the share of Republicans viewing Musk as 'very favorable' has dropped from 38 per cent in April to 26 per cent now. At the same time, antipathy toward Musk among Democrats has waned a little. About two-thirds, 65 per cent, of Democrats have a very negative view of Musk, down slightly from about three-quarters, 74 per cent, in April. Musk's bitter back-and-forth with Trump has business implications, too. Tesla was already struggling with a backlash against Musk's association with Trump. Sales across Europe plunged by half in May, even as growth in the electric car market accelerated. Then the company's shares plunged in value when Musk began sparring publicly with the president. Victoria Brown, of Kansas City, Kansas, rated Tesla 'somewhat unfavorable' because she objects to how Trump is conducting his administration and links the company's owner with the president's agenda. 'I don't favor Trump. So, pretty much the fact that they have been working together means I don't care too much for Tesla,' said Brown, 63, a political independent and an insurance agent. Musk's overall approval remains unchanged While the intensity of people's feelings about Musk may have changed, their overall opinions have not. About one-third of U.S. adults have a favorable opinion of Musk, compared with about six in 10 who hold an unfavorable view, while about one in 10 don't know enough to say. That's unchanged from the April poll. The new poll was conducted from June 5 to 9, after Musk left his government role and began attacking Trump's marquee legislative priority. Musk's public clash with Trump began four days after Trump honored Musk effusively during an Oval Office event discharging him from duties as the head of the Department of Government Efficiency. After first tearing down the budget bill, Musk two days later complained he had never seen the language, and he aimed his fire at Trump, suggesting the president didn't sufficiently appreciate the role Musk assumed as the chief benefactor to Trump's reelection effort. 'Without me, Trump would have lost the election, Dems would control the House and Republicans would be 51-49 in the Senate,' Musk wrote. 'Such ingratitude.' Musk went on to claim without evidence that the federal government was concealing information about Trump's association with infamous pedophile Jeffrey Epstein. Musk deleted the post, and early Wednesday he stepped back from his attacks on Trump, writing on X that he regretted some of his posts and they 'went too far.' Views of Tesla are far more negative than other car companies Tesla endured a difficult first quarter in 2025, with its sales falling while the world's leading electric car manufacturer faced protests in showrooms. The new poll also shows that Tesla is viewed far more negatively than some of its peers — notably, Ford, Toyota and General Motors. Only about one-third of U.S. adults have a 'very' or 'somewhat' favorable view of Tesla. About half of U.S. adults have an unfavorable opinion of Tesla, including 30% of Republicans. Democrats, at 66%, are more than twice as likely as Republicans to have a negative view of Tesla. But even among Republicans, Tesla is viewed less favorably than the other brands. Marisa Mills is no Musk fan. The 41-year-old teacher from Oakland, California, objects to his association with Trump and what the Democrat sees as their misguided notion that government is always well served by operating like a business. And yet she was once proud to have Tesla building cars in her own county. She soured on the company in 2020, when Musk sued Alameda County over its workplace restrictions during the coronavirus pandemic, before he moved the company to Texas in 2021. 'My government is supposed to serve the people, not his company. We were all glad to see him go,' Mills said. 'I do regret that we now have feelings of regret for the Tesla car product. We were once so proud.' ___ The AP-NORC poll of 1,158 adults was conducted June 5-9, using a sample drawn from NORC's probability-based AmeriSpeak Panel, which is designed to be representative of the U.S. population. The margin of sampling error for adults overall is plus or minus 4 percentage points. Thomas Beaumont And Linley Sanders, The Associated Press
