Tesla 2024: 3 things that defined its big year
Tesla's ( TSLA ) 2024 went out with a bang, thanks to CEO Elon Musk and one of his biggest gambles yet.
While the stock gained over 70% year to date thanks to a post-Trump election surge, it wasn’t all smooth sailing for the EV giant. Here are three highlights from the year and what to expect in 2025.
The robotaxi gambit and cheap EV pivot
When Tesla released its third quarter 2023 results in January, it warned its production growth would be “notably lower” in the year ahead. Meanwhile, investors questioning Tesla’s profitability picture in March sent shares to their lowest in nearly a year . Another big delivery miss in the first quarter didn’t help matters — nor did growing competition in China .
Musk saw an opening and tried to turn the tide, claiming Tesla would finally reveal its long-awaited robotaxi in August.
Initially, there was concern that the robotaxi push would hamper the release of the cheaper EV or relegate it to the dustbin. Emmanuel Rosner, a Deutsche Bank analyst at the time, felt Tesla’s focus on the robotaxi came at the abandonment of the cheap EV, which was a main reason for owning the stock. In fact, Musk had said in the past that a cheap EV would be difficult to make profitably .
Later in the month of April, after Tesla stock hit its nadir for the year, Tesla confirmed in its fiscal Q1 earnings report it would indeed accelerate the launch of more affordable vehicles while it worked on the robotaxi, assuaging investors and analysts.
A couple of months later, while investors awaited news on the robotaxi and cheap EV, issues with design and functionality led Tesla to delay its robotaxi reveal to Oct. 10. At the time of the robotaxi delay, a run-up in shares plus Musk’s open support for Donald Trump — whose antipathy toward EVs was not secret — led some investors to dump Tesla shares.
“TSLA has always traded with a premium attached to it for other, future growth initiatives. However, at current levels, we believe that unidentifiable premium is too significant,” UBS analyst Joseph Spak wrote in a note to clients .
Later in October, Tesla finally revealed what all were waiting for: the new robotaxi, dubbed the Cybercab. While the slick Hollywood soundstage event provided plenty in terms of visuals, the vehicle itself and planning were light on details.
But bullish analysts were still focused on the long-term potential.
“We think this is going to drive the future value of Tesla. When we look out five years, we think it'll be two-thirds of the enterprise value in five years. So we're super excited about it,” ARK Invest’s Tasha Keeney said.
That sentiment, plus solid Q3 delivery numbers, buoyed the stock and Wall Street. Tesla again confirmed in the earnings report that a cheaper EV was coming and gave Wall Street analysts more details to chew on.
“The new Tesla model (we refer to as ‘Model Q’) should launch in 1H25 and will be priced <$30,000 including subsidies (i.e., $37,499 if US EV tax credit goes away),” Deutsche Bank analyst Edison Yu wrote in a note in December following a meeting with Tesla's investor relations team.
Look for Tesla to show off that cheap EV in the first few months of the new year. Unless, of course, Musk delays it.
‘Don’t fire Steve Jobs’: Musk’s payday showdown
It wasn't just planning new products that consumed Musk's time.
"I am uncomfortable growing Tesla to be a leader in AI & robotics without having 25% voting control," Musk said on his X account in early January . "Unless that is the case, I would prefer to build products outside of Tesla."
This request came after a Delaware judge invalidated Musk's record-breaking $56 billion Tesla pay package, calling the compensation granted by the EV maker's board "an unfathomable sum" that was unfair to shareholders. The saga with Musk, his Tesla stake, and compensation would roil Tesla through the end of the summer.
"The Street views Tesla correctly (in our view) as a disruptive tech leader, and if Musk ultimately went down the path to create his own company (separate from Tesla) for his next generation AI projects this would clearly be a big negative for the Tesla story," Wedbush analyst Dan Ives wrote at the time.
Tesla filed its proxy statement ahead of the EV maker's June shareholder meeting with two big asks: that shareholders vote to move Tesla’s state of incorporation to Texas and that they ratify CEO Elon Musk’s 2018 pay package.
The back-and-forth over the future of Musk’s pay was a drawn-out affair, with shareholder activists claiming the judge’s ruling should stand and others, like major shareholder Ron Baron, backing Musk’s massive pay package .
In the end, Tesla shareholders reapproved Musk’s record-breaking pay pact , removing, it seemed at the time, a big overhang on the stock as investors blessed the controversial compensation plan.
“There’s an old saying in Silicon Valley: ‘Don’t fire Steve Jobs.’ When someone truly brilliant comes along and chooses to run a company, any sensible investor must do everything in their power to keep them,” wrote DataTrek’s Nick Colas in the vote’s aftermath.
But... wait! The same Delaware judge who voided Musk’s package invalidated it again in December, despite the Tesla shareholder vote , punting Musk’s pay fiasco into 2025, with a possible Supreme Court appeal coming.
Musk’s big bet on Trump
Musk’s embrace of President-elect Donald Trump has paid off, so far, for Tesla shareholders (and Musk himself). The stock surged a whopping 15% the day after the election. Tesla stock is now up an eye-popping 90% since Trump’s election win last month.
The stock’s run continued through the month of November with reports the Trump team would ease self-driving rules , boosting Tesla’s full self-driving and robotaxi efforts. The Tesla/Trump/Elon trade carried on through November and December as the “animal spirits,” as described by UBS, pushed the stock up and up. Tesla shares closed at an all-time high in mid-December.
The good times should continue to roll if recent comments from the Street are any indication.
“We estimate the AI and autonomous opportunity is worth at least $1 trillion alone for Tesla and we fully expect under a Trump White House these key initiatives will now get fast tracked,” Ives of Wedbush said in a note on Dec. 16, upping his price target to $515 to from $400.
Ives also predicts Tesla could hit $2 trillion in market cap by the end of 2025 (it stands at around $1.5 trillion now) as Tesla’s “autonomous vision starts to take shape,” along with “very solid Tesla delivery demand” from China adding to the gains. If all goes to plan, Ives's “bull case” for Tesla in 2025 has the stock at the dizzying heights of $650 a share.
On Dec. 17, Mizuho analyst Vijay Rakesh joined in and more than doubled his price target to $515 from $230, citing ‘idiosyncratic tailwinds’ that would boost Tesla in the near term and beyond 2025.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on X and on Instagr am
