Tesla’s progress in autonomy, particularly full self-driving (FSD), is valued highly by RBC Capital over the company’s auto business. Analyst Tom Narayan of RBC Capital believes that Tesla’s one-month free FSD trial could serve as a catalyst in the second quarter of 2024, potentially bringing more customers into showrooms and increasing the FSD’s attachment rate. He noted that autonomy is more important than Tesla’s car business and pointed out that the free FSD trial could play a key role in Tesla’s investment case in the long term, especially after the delivery miss in the first quarter.

Despite his positive view of Tesla, Narayan acknowledged that current sentiment toward the company is negative due to softer-than-expected deliveries. In the first quarter of 2024, Tesla experienced an 8.5% year-over-year drop in deliveries, totaling around 386,810 vehicles. The Model 3 and Model I vehicles accounted for most deliveries at 369,783 units, while other models such as Cybertruck, Model S and Model X had only 17,027 deliveries.

RBC Capital identified several factors that impacted Tesla’s Q1 deliveries, including the shutdown of Giga Berlin plant due to arson attack, transportation challenges caused by Red Sea conflict and pre-purchase activity ahead of tax credit expiration for Model 3 under IRA. The investment bank also speculated about the impact of slowdown demand for electric vehicles in US on Tesla’s deliveries.

Looking ahead, RBC Capital predicts that by 2035, Tesla will sell about 2.5 million vehicles a year in North America and approximately half a million cars annually in Western Europe and China. The investment bank also predicts that Model 3 and Model I vehicles will contribute about two million units annually when matured while Model S will account for about one million units sold annually when it matures .

By Samantha Johnson

As a dedicated content writer at newspuk.com, I immerse myself in the art of storytelling through words. With a keen eye for detail and a passion for crafting engaging narratives, I strive to captivate our audience with each piece I create. Whether I'm covering breaking news, delving into feature articles, or exploring thought-provoking editorials, my goal remains constant: to inform, entertain, and inspire through the power of writing. Join me on this journalistic journey as we navigate through the ever-evolving media landscape together.

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