Tesla Inc.‘s (NASDAQ:TSLA) planned $30,000 electric vehicle could disappoint investors if it fails to introduce a new compact form factor, according to prominent Tesla bull Gary Black, managing partner of The Future Fund LLC.

What Happened: Black warned on social media platform X that simply releasing a scaled-down version of existing Models 3 or Y could lead to significant cannibalization of Tesla’s current lineup. This could prompt Wall Street analysts to lower their 2025 delivery growth estimates, currently projected at 16% year-over-year.

“A Tesla’s new $30-$35K car may be a nothing burger if Tesla doesn't introduce a new form factor to extend TSLA's franchise into the compact category,” Black wrote.

The caution comes ahead of Tesla’s fourth-quarter earnings report due Wednesday, where investors eagerly await details about the company’s new affordable EV expected to be unveiled in the first half of 2025.

“Much depends on whether the new $30K-$35K Tesla vehicle extends Tesla’s TAM to the compact category, which represents 15% of global volume,” Black wrote, highlighting the significance of targeting a new market segment rather than just offering cheaper variants of existing models.

See Also: Judge Blocks Trump’s Order To Freeze Federal Grant Money

Tesla faces mounting pressure after recording its first annual delivery decline in 2024, with 1.79 million vehicles delivered compared to 1.81 million in 2023. Morgan Stanley analysts expect 2025 delivery growth between 10% and 20%, below Tesla CEO Elon Musk‘s guidance of 20-30%.

The earnings call may also address crucial topics including the Model Y refresh ramp-up, progress in Full Self-Driving capability, and potential impacts of changes to federal EV tax credits. Goldman Sachs analyst Mark Delaney maintains a neutral rating with a $345 price target, emphasizing the importance of production speed for the refreshed Model Y.

Bank of America recently downgraded Tesla to Neutral despite raising its price target to $490, suggesting the stock’s recent rally has captured much of its long-term potential. The firm values Tesla’s future robotaxi segment at potentially $420 billion in the U.S. market alone.

Price Action: Tesla’s closed at $398.10 on Tuesday, gaining 0.24% for the day. In after-hours trading, the stock dipped 0.36%. Over the past year, Tesla’s stock has surged 108.51%, according to data from Benzinga Pro.

Read Next:

• Magnificent 7 Earnings Ahead: 3 ETFs To Ride The Wave

Image Via Shutterstock

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.