Tesla is on track for another year where electric vehicle sales missed the mark. The stock is near record levels anyway, as investors and analysts eye future artificial intelligence-fueled growth.
Through Nov. 30, Tesla’s sales in the European Union this year have fallen by almost 39% compared with the same period a year ago, according to data released Tuesday by an industry group. Deliveries in China dropped by more than 8% through November, while U.S. sales are predicted to drop 9% in 2025, according to estimates.
Overall, Tesla is expected to report December quarter sales of 449,000 vehicles and full-year deliveries of about 1.6 million EVs, according to the FactSet consensus. That puts it on pace for its second annual sales decline in a row.
Canaccord analyst George Gianarikas on Monday cut his forecast for fourth-quarter EV sales to about 427,000 from 470,000. But he also raised his price target to $551 per share from $482 a share and reiterated a buy rating on the stock.
“With Tesla’s recent share-price strength, the market seems to be looking through the quarter, and we intend to do the same,” Gianarikas wrote.
On Monday, the stock reached a record intraday high of $498.83, before closing that day at $488.73. It fell 0.7% on Tuesday.
While he sees potential for Tesla to rebound on the EV front, much of Gianarikas and the market’s focus is on AI, namely robotaxis. Wedbush analyst and Tesla bull Dan Ives recently suggested the company could reach a $3 trillion value by 2027 based on its robotics and AI plans. That implies a near doubling from the current market capitalization of about $1.6 trillion.
“Perhaps more importantly though, the narrative around robotaxi remains strong,” Deutsche Bank analysts wrote in a recent note to investors as they also lowered their forecast for Tesla’s EV sales.
Tesla plans to launch a fully-autonomous ride-hailing network across the U.S. that can compete with $AlphabetGOOGL$-backed Waymo and Uber Technologies. It’s also working on a custom robotaxi set to enter production next year.
The company has been operating a limited ride-hailing service in Austin, Texas, and the San Francisco Bay Area for a several months. Tesla has started testing unsupervised trips in Austin with the goal of offering fully-autonomous rides by the end of the month.
Tesla also aims to expand its ride-hailing service to several additional cities across the U.S. and grow its fleet in Austin by the end of the year. However, its progress has been slower than Gianarikas and others had hoped, and 2026 is about a week away.
Seth Goldstein, an analyst at Morningstar, thinks the market has put too much value on the robotaxi business, which he says will take years to fully develop. “Tesla is trading way above where we think it’s worth,” said Goldstein, who assigns the equivalent of a sell rating on the stock and a $300 price target, which implies about 39% downside from current levels.
In addition to robotaxis, Tesla is working on humanoid robots and custom AI chips to power its technology and data centers. Both the robots and chips are expected to enter production in 2026.