Tesla stock faces delivery challenges amid robotaxi focus, Baird says

Baird maintained its Neutral rating and $320 price target on Tesla (TSLA), projecting Q2 deliveries at 377,000 vehicles, notably below the FactSet consensus of 392,800 units due to weak third-party data and Model Y production challenges. While the firm noted that excitement surrounding Tesla's robotaxi launch could overshadow near-term delivery results, it expressed concern over a potential "net negative margin impact" from the upcoming affordable vehicle launch in H2 2025. This outlook comes as Tesla pivots towards autonomous driving technology amid intensifying competition in the global EV market.

Analysis

Baird's recent analysis on Tesla (TSLA) maintains a Neutral rating and a $320 price target, signaling a cautious stance despite market enthusiasm for the company's new ventures. The firm projects Q2 vehicle deliveries at 377,000 units, a figure notably below the FactSet consensus of 392,800, citing weak third-party data and persistent challenges with the new Model Y production ramp-up. While these near-term operational headwinds are significant, Baird notes that investor focus may be diverted by the excitement surrounding the upcoming robotaxi launch. Looking further ahead, the firm flags a material risk, suggesting the launch of Tesla's affordable vehicle could introduce a "net negative margin impact" in the second half of 2025. This strategic pivot towards autonomy and lower-cost models occurs as the company contends with intensifying competition in the global electric vehicle market, making the execution on both new and existing product lines critical.

Key Decisions for Investors

• Investors should brace for potential negative volatility in TSLA shares around the official Q2 delivery announcement, as Baird's forecast of 377,000 vehicles is substantially below consensus estimates.
• Traders must weigh the tangible risk of a near-term delivery miss against the more speculative, sentiment-driven upside from the robotaxi narrative, which may temporarily insulate the stock price from weak fundamentals.
• Long-term holders should closely monitor future company guidance on the affordable vehicle's production costs and pricing, as Baird's analysis highlights a significant risk of margin compression beginning in H2 2025.