Tesla Stock Sinks Amid Report of Affordable Vehicle Delay

We still view Tesla stock as fairly valued.

Seth Goldstein, CFA 22 April, 2025 | 8:55AM
Facebook Twitter LinkedIn

Charger with Tesla logo at a Supercharger rapid battery charging station for the electric vehicle company Tesla Motors.

Editor's Note: This analysis was originally published as a stock note by Morningstar Equity Research.

Key Morningstar Metrics for Tesla

Fair Value Estimate: $250

Morningstar Rating: ★★★

Morningstar Economic Moat Rating: Narrow

Morningstar Uncertainty Rating: Very High

Tesla Stock Update

Reuters reported that Tesla TSLA plans to delay the launch of its lower-cost vehicle from mid-2025 to between the third quarter and early 2026. The shares were down 4% in April 21 premarket trading.

Why it matters: Tesla deliveries fell in 2024 and were down 13% year over year in the first quarter. In our view, Tesla needs to launch its new affordable vehicle in order to increase deliveries. We think Tesla’s current product lineup is near full market saturation in the luxury auto segment.

Lower deliveries will also reduce Tesla’s total addressable market for its ancillary products and services, which include autonomous driving subscription software, charging, and insurance in a select number of US states.

The bottom line: We maintain our $250 fair value estimate for narrow-moat Tesla. We want to hear management’s updated plan on the April 22 earnings call before updating our forecast. Our current outlook assumes a little over 1% of 2025 deliveries from the affordable vehicle.

We view Tesla shares as fairly valued currently, trading slightly below our fair value estimate but in 3-star territory. Accordingly, we would wait for the stock to offer a larger margin of safety before recommending an entry point.

Long view: The affordable vehicle delay affects 2025 and 2026 deliveries. However, we see no impact on our long-term outlook as the vehicle will still be a part of Tesla’s product lineup. We expect the new vehicle to eventually generate the majority of Tesla’s total deliveries.

Coming up: Another new product is Tesla’s robotaxi service, which is set to begin testing in June. We hope to hear an update from management on the earnings call on the autonomous driving software progress and the testing plans. Tesla’s robotaxi accounts for $65 of our $250 fair value estimate.


The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Seth Goldstein, CFA  Seth Goldstein, CFA, is an equity analyst for Morningstar

© Copyright 2025 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures