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Wall Street banks expect Tesla’s vehicle sales to grow more slowly this year than his boss Elon Musk had forecast as Donald Trump tries to dismantle Biden-era climate policies in favor of electric vehicles.
Tesla is poised to sell 2.07 million vehicles this year, up 16 percent in 2024, according to analyst forecasts compiled by FactSet. That would be a rebound from last year, when the group reported its first drop Since 2011But that’s below the 20 to 30 percent contraction estimated in October and nearly 40 percent below the annual growth rate of the previous two years.
These figures underscore the challenges Tesla faces from Trump’s promise to roll back the policies that boosted our EV sales. An executive order last week said the White House would consider “eliminating unfair subsidies and other unwarranted government-imposed market distortions.”
“The opposition to Trump 2.0 has achieved 2025 volume expectations,” said Morgan Stanley analyst Adam Jonas.
Tesla, which reports fourth-quarter earnings on Wednesday, would be hit especially hard if Trump rescinds a $7,500 tax credit for EV buyers. Barclays analyst Dan Levy estimated that about two-thirds of Tesla’s U.S. sales benefit from the credit.
Changes to EV subsidies could take effect from 2026; Some analysts said Tesla’s sales figures could be inflated by buyers rushing to complete sales earlier. Levy forecasts “a significant EV pre-purchase” in the second half of 2025 before volume declines next year; Other analysts thought the pre-buys were already boosting Tesla’s sales.
Some analysts questioned how large the pre-purchase would be; BNP Paribas Exxon estimates volume growth could be lower than 12 percent this year.
Tesla investors are also concerned about broader “pressures” in the EV market, China competition [and] CyberTruck reduces fragmentation”, said Jonas.
Overall US EV sales growth slowed last year due to high pricing and a lack of new models; EV market share was 8 percent, compared to 7.6 percent in 2023.
Meanwhile, Trump’s trade policy toward China could raise tensions with Tesla’s second-largest market.
Trump’s musketry endorsements and interventions in British, Italian and German politics may also turn off some potential customers. EU sales of Tesla’s EVs fell 13 percent year-on-year, according to European car industry body ACA.
Ginny Buckley, founder of EV buying advice site Electrifying.com, said: “Tesla was a market leader, and still is in many ways, but people are turning off.”
Tesla’s aging portfolio is another cause for investor concern. The 2020 Model Y sport utility vehicle is the Cybertruck, which starts at $82,000 and sells for Between 9,000 and 12,000 The unit is a quarter.
This year Tesla is remaking the Model Y, but last year it scrapped plans for a new $25,000 vehicle dubbed the Model 2 in public and known internally as the NV91. Musk has been vague about plans for a successor to the NV91, leading some analysts to speculate that it could announce a “model 2.5” this year.
The company has hinted to investors that the new model could arrive in the second half of this year; Many expect more details to emerge this week.
Musk previously predicted that overall Tesla sales could top 20 million a year in the future. Even with a new affordable offering, RBC Capital Markets analyst Tom Narayan said that’s unlikely. He expects Tesla to eventually achieve a maximum of 6 million in annual sales.
Despite risks to sales growth, analysts said Tesla’s future looks bright — thanks to its pivot into artificial intelligence. Musk is gambling that advances in AI technology have made it possible to create one A fleet of autonomous “robotaxis”..
“Selling cars is a small part of that,” said Narayan, adding that Tesla’s new revenue stream will come from semi-autonomous driving software.
Tesla is also developing a humanoid robot that Musk says will be “the biggest product of any kind” and should propel the company from its $1.3tn market capitalization today to a valuation of 25tn.
“A ‘regulator friendly’ Trump White House helps unlock Tesla stock value as autonomous [car] The timeline has probably accelerated,” said Wedbush analyst Daniel Ives.
He said “there will be an anti-EV focus around emissions standards and the removal of the $7,500 tax credit” but this will be counterbalanced by a “focus on AI innovation, which provides a very favorable tailwind.”
