Evercore ISI Reiterates In Line on Tesla, $235 Price Target

Evercore ISI analyst Chris McNally reiterated an In Line rating and $235 price target on Tesla (NASDAQ: TSLA)

“PM Summary – As we noted in Q4, analyzing Tesla from a results/reaction perspective is increasingly difficult, and Q1 has proven no exception… Lackluster deliveries and financial result of 27c EPS (vs Street ~38-40c) failed to drag TSLA down thus far in after-mkt, despite confusing product timeline & 2025 guidance now being pulled & “revisited” during Q2 EPS, in line with our view on volume downside (Q4’s “return to growth in 2025” commentary also removed).

Q1 Metrics – slightly below on Rev & GP (~2-3c of miss), while higher OpEx dragged on EBIT (AI & R&D projects responsible for 75% of miss, ~9-10c).

12.5% “Clean” mgn (ex-Credits) ‘good enough’ to clear 12-13% bar for a volume- & downtime-affected Q1.

Model Y Variant – new vehicles “remain on track” for 1H’25 (June) despite reported delay, although no hard detail which will drive further confusion.

We previously estimated SoP in 2H’25, with the outlook Tesla could produce 150-200k units in ’26 as production ramps – could we get a 2-stage launch of cheaper variants (cheaper Y in NA in June and something dedicated for China ‘26)?

Elon’s tone – Mindful Elon came out of gate discussing DOGE and plan to re-allocate time to TSLA starting in May, while also (unsurprisingly) focusing on AI during call noting potential for scale (thanks to “generalized AV solution”) & financial contribution (2H’26 before going “exponential”) of robotaxi offering, likely why stock ++ aft-mkt. ’25 Volumes – likely now squarely DOWN given 336k Q1 on MY shutdown & brand deterioration (debate on which factor most responsible as MY changeover resulted in “several weeks of downtime”).

We see Q2 bar of 425k deliveries important to help gauge “normalized demand” (Teslike ~412k currently), with downside of 1.65MM ’25 & potential return to growth at 1.8- 1.9MM units in ’26 (EvrISI 1.9MM, St 2.1-2.2MM).

Austin Robotaxi “June timing” & Optimus – reaffirmed, w/ scant details on TNC service (tele-ops, safety driver, ODD, etc.), & expansion to “other cities” (previously “by YE25”).

Cybercab “scheduled for volume production” ‘26 won’t change skeptics demand view.

Optimus builds also on track on Fremont pilot line, with internal deployments ongoing into “thousands of units” by YE. ’25-’27 EPS Revisions – will continue to drift lower towards $2 EPS or below (from $2.50 prior) ’25 on both volume commentary (St will move to 1.7MM or less) while Street ‘26 ~$3.50 will initially move down towards ~$3 on higher Opex with further risk to $2.50-3 if volumes are closer to 1.9MM.

Stock +4-6% Aft-Mkt.”

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