Tesla's Pivot to AI and Robotics Amid Declining Car Sales: A Risky Gamble?

The biggest Tesla (TSLA) cheerleader on Wall Street just slashed delivery estimate

Morgan Stanley analyst Adam Jonas, often described as Tesla's (TSLA) biggest cheerleader on Wall Street, just slashed his delivery estimate for the automaker by 300,000 units. And yet, he still thinks the stock is going to double. Since last year, Tesla has been seeing its demand tumble and in 2025, the tumble is accelerating into a free fall in Europe amid broader brand destruction thanks to its CEO Elon Musk. Earlier this month, we reported that Wall Street started to wake up to Tesla's demand situation and it is reducing its delivery estimates, starting with the first quarter. Now, even Adam Jonas is waking up. Jonas has been branded "Tesla's biggest cheerleaders on Wall Street" for his consistent rosy notes and ratings pushing the stock higher. He recently updated his estimates on Tesla downgrading his Q1 deliveries to 351,000 units - down roughly 10% compared to the same period last year. Just a few weeks ago, Jonas thought Tesla would deliver 415,000 units in Q1. The analyst also greatly reduced his full-year delivery estimate from 1,924,000 to 1,615,000 units. He went from believing Tesla would grow deliveries by 7.5% in 2025 to predicting it will be down about 10%. Despite this major shift, Jonas is still recommending people buy Tesla's stocks. His recommendation is based on Tesla being "a highly diversified play on AI and robotics" in his view: "In our view, Tesla's softer auto deliveries are emblematic of a company in the transition from an automotive 'pure play' to a highly diversified play on AI and robotics." Jonas reduced his price target on Tesla from $430 to $410 a share. Morgan Stanley has been criticized in the past for Jonas' ultra-optimistic views on Tesla while having many separate financial dealings with CEO Elon Musk. To summarize Jonas' positive view on Tesla, he believes that it doesn't matter that its main business (selling cars) crumbling doesn't matter because other products (that don't exist yet) might come later and they might be profitable. It's ridiculously dumb. Tesla is nowhere near achieving self-driving on its consumer vehicles. It will likely never happen in HW4 and HW3 vehicles - resulting in a giant liability since they sold vehicles with that promise. As for the robots, I'm a little more bullish on those since I think it's an easier AI problem to solve since the safety issue is less significant. However, I don't see Tesla having a significant advantage over the competition, like Unitree, which actually looks to be ahead of Tesla.

Tesla's Shift to AI and Robotics Hangs in the Balance as Sales Decline - Softonic

Morgan Stanley's Adam Jonas has lowered Tesla's delivery estimates, reflecting declining demand, while maintaining a positive outlook on the company's future in AI and robotics Adam Jonas, a Morgan Stanley analyst often regarded as Tesla's most enthusiastic supporter on Wall Street, has revised his delivery estimates for the electric vehicle manufacturer. He has decreased his forecast for first-quarter deliveries from 415,000 to 351,000 units, marking a reduction of approximately 10% compared to the same period last year. This adjustment reflects a broader trend of diminishing demand for Tesla vehicles, particularly in Europe, where projections indicate a steep decline heading into 2025. Despite this significant reduction, Jonas maintains a bullish stance, recommending investors buy Tesla stock, which he believes will double in value. He posits that Tesla is strategically transitioning from a pure automotive entity to a diversified player in artificial intelligence (AI) and robotics. This shift, however, relies heavily on products that have yet to materialize, prompting skepticism among analysts and industry observers alike. Jonas has also cut his total delivery estimate for the year, reducing it from 1.9 million to 1.6 million units. Moreover, his predictions for 2030 have shifted dramatically from an optimistic 5 million deliveries to 4 million, well below Elon Musk's ambitious goal of reaching 20 million units by that same year. Critics of Jonas argue that his upbeat assessments are disconnected from the current challenges facing Tesla, including plummeting sales and collapsing gross margins. While Jonas remains optimistic about Tesla's future in AI and robotics, his assertions may not align with the reality facing Tesla's core automotive business. As the company grapples with declining demand and increased competition, its trajectory over the next few years remains uncertain. Some analysts suggest that without significant breakthroughs in self-driving technology and other products, Tesla could struggle to regain its former dominance in the automotive space.