Goldman Sachs Reiterates Neutral on Tesla, $235 Price Target

Goldman Sachs analyst Mark Delaney reiterated a Neutral rating and $235 price target on Tesla (NASDAQ: TSLA).

“On 2/25/25, media outlets reported that Tesla had pushed an update to some users who had previously purchased Tesla’s FSD software (which costs ¥64,000 or ~$8,750 USD) with several FSD-like features including automatic lane change, traffic light detection, and turning capabilities.

Tesla commented on its 1Q25 earnings call that it was able to launch supervised FSD in China with minimal local specific data for the China market, as the company was able to leverage the more generalized software it had already developed.

That said, Tesla’s FSD software has historically worked better in the US per media reports, as Tesla has had more data and time to refine the product domestically.

Tesla also spoke to the benefits of local training and parameters on its 1Q25 call.

Per reviews (link & link), FSD in China has performed relatively well, especially given limits to Tesla’s data collection in China.

However, some reviews cite a lack of understanding of local traffic rules (e.g.

Tesla vehicles going into shoulder/bike lanes on turns) and the sporadic use of wrong lanes, which we believe could be due to the more limited data for the China market.

Tesla’s FSD offering is one of several ADAS options for consumers in China, with many local competitors offering this as a standard feature even on mainstream vehicles (Exhibit 6).

The level of technology and cost improvement that Tesla can achieve with FSD, both absolute and relative to competitors, will be key for its longer-term economics related to autonomy in our opinion (both globally and in China).

We note that, there have also been media reports (including Reuters, Engadget, CarNewsChina, and the WSJ) that China is looking to better regulate how companies test, deploy, and market smart driving features.

We believe that Tesla hopes to offer robotaxi services widely over time, but it plans to do this first in Texas starting in June 2025.

For the US market, we believe the cost of Tesla’s vehicles could be an advantage compared to other robotaxi offerings (if Tesla’s technology gets to the necessary level to deploy).

Specifically, its COGS per vehicle globally were about $35.5K in 1Q25, and per Tesla its more recent HW4 equipped vehicles have all of the hardware needed for L4.

If Tesla eventually also starts a robotaxi operation in China, it would be facing a different competitive landscape with several AVs having attractive costs, and we believe technology development, scale/cost, and regulatory approvals will be key factors to monitor to assess Tesla’s success with robotaxis in the region.”

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