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Tesla Shares Rise as Musk Promises Cheaper EVs and Autonomous Ride-Hailing

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Tesla shares climbed more than 2% on Thursday after CEO Elon Musk announced plans to launch lower-cost electric vehicles (EVs) in the first half of 2025 and begin testing an autonomous ride-hailing service in June. These commitments helped investors look past a weaker-than-expected fourth quarter, which saw declining revenue and shrinking margins due to delayed model upgrades and rising competition.

Despite Tesla’s first annual decline in deliveries in 2024, the company assured investors that its vehicle business would return to growth in 2025. However, Tesla did not reaffirm Musk’s earlier forecast of a 20-30% sales increase for next year.

Morgan Stanley analysts noted that Tesla is shifting from being a traditional automotive company to a diversified player in AI and robotics. Investors remain optimistic, especially as Musk’s support for U.S. President Donald Trump could lead to more favorable regulatory conditions for Tesla’s robotaxi ambitions.

Musk revealed that Tesla will begin unsupervised testing of its autonomous ride-hailing service in Austin, Texas, though he did not provide specific details on how it would function. The company also did not share pricing details for its upcoming affordable EV models.

If Tesla’s stock gains hold, its market value could rise by approximately $28 billion. The stock surged 62.5% in 2024 and is currently trading at 118 times its 12-month forward earnings, significantly higher than Ford (6.07) and General Motors (4.48).

At least 19 brokerages have raised their price targets for Tesla stock, with a median target of $300, up from $278 at the end of December. Analysts believe that Tesla’s growth will be fueled by Full Self-Driving technology and the introduction of an affordable EV. However, some experts remain cautious about Musk’s timeline for launching robotaxis, citing regulatory challenges, particularly in Europe and China.

Tesla also announced an increase in its capital expenditure forecast, expecting to spend over $11 billion in 2025 and the following two fiscal years.

 

Tesla Achieves Record China Sales in 2024 Despite Global Decline

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Tesla has reported an 8.8% increase in its China sales for 2024, reaching a record high of more than 657,000 vehicles, marking a strong performance in the face of declining global deliveries. This rise in China, which is Tesla’s second-largest market, contrasts with the company’s overall global sales, which experienced a 1.1% drop for the first time. In December alone, Tesla’s sales in China surged 12.8% from November, reaching another record of 83,000 units.

Tesla’s success in China accounted for 36.7% of its total global deliveries in 2024. Despite this achievement, global deliveries slipped due to a variety of challenges, including a decrease in exports from China by 24%. Factors such as reduced European subsidies, a U.S. shift toward more affordable hybrid vehicles, and rising competition, particularly from China’s BYD, negatively impacted Tesla’s performance.

Tesla’s China-made EVs also faced some setbacks, with exports to Europe and other markets falling by 0.4% in December compared to the previous year. Full-year sales of Tesla’s China-made Model 3 and Model Y vehicles, including both domestic and export figures, saw a 3.3% decline. Exports dropped to approximately 260,000 units, marking the worst performance for Tesla since 2021. The European Union’s investigation into Chinese-made EV subsidies, which led to a 7.8% tariff on Tesla vehicles from China, also contributed to the decline in exports.

John Zeng, an expert at GlobalData, noted that Tesla’s record China sales reflect the unique position of the Chinese market, which remains a significant growth driver in the global electric vehicle sector. In contrast, other major markets are seeing slower growth or even declines. According to industry data, China accounts for a dominant share of the global EV and hybrid market, with over 90% of the increase in global sales attributed to the country in 2024.

Although Tesla’s global sales reached 1.79 million vehicles in 2024, narrowly surpassing BYD’s sales of 1.76 million units, it faces increasing competition from Chinese manufacturers. BYD, in particular, has led the EV price war in China and exceeded its own sales targets, with a 12.1% increase in global sales. Tesla, in response to mounting competition, has been offering discounts and zero-interest financing to maintain its market position in China.

 

Panasonic Energy Aims to Cut China Supply for U.S. EV Battery Business Amid Tariff Concerns

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Panasonic Energy, a key supplier of electric vehicle (EV) batteries to Tesla and other automakers, has set its top priority to eliminate its reliance on China for U.S.-made batteries, according to a senior executive. Allan Swan, President of Panasonic Energy of North America, told Reuters that adjusting the company’s supply chain is its “No.1 objective” in response to the incoming policies of U.S. President-elect Donald Trump, who has pledged to impose significant tariffs on imported goods, including a 60% tariff on Chinese products.

Panasonic Energy, a subsidiary of Japanese electronics giant Panasonic, currently relies on some Chinese suppliers, though Swan emphasized that the company is working towards reducing this dependence. “We do have some Chinese supply, but we don’t have a lot, and we plan to have even less going forward,” Swan stated. The shift is being accelerated by the potential tariffs and is part of Panasonic’s broader strategy to strengthen its American supply chain.

The raw materials used in Panasonic Energy’s U.S.-manufactured batteries primarily come from international suppliers, including those based in Canada. In response to President Trump’s transition team’s recommendation to impose tariffs on battery materials, Panasonic is taking a “three-pronged approach” to modify its supply chain. This includes securing more U.S. suppliers, supporting Japanese and Korean suppliers to set up operations in the U.S., and collaborating with existing suppliers already planning U.S.-based operations.

Swan emphasized that Panasonic Energy’s focus is on building a robust domestic supply chain to meet U.S. production targets. The company operates a factory in Nevada and plans to open another in Kansas later this year. These efforts are part of Panasonic’s broader goal of aligning with U.S. trade policies and increasing local production as the U.S. shifts toward greater protectionism.

Japanese firms, including major automakers like Nissan and Honda, are bracing for the potential impacts of U.S. tariffs, particularly those targeting Mexico, a key low-cost production hub for the American market. Heavy machinery company Komatsu has also voiced concerns about the potential trade disruptions between the U.S. and Canada.