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Tesla’s Autonomy Progress is Highly Valued by RBC Capital

Tesla’s progress in autonomy, particularly its Full Self-Driving (FSD) feature, is highly valued by RBC Capital over the company’s car business. Analyst Tom Narayan from RBC Capital believes that Tesla’s one-month free FSD trial could serve as a catalyst in the second quarter of 2024 and increase deliveries. He emphasizes that autonomy is more significant than Tesla’s car business and that the FSD free trial might play a crucial role in the Tesla investment thesis in the long term.

In the first quarter of 2024, Tesla experienced an 8.5% year-over-year decline in deliveries, totaling around 386,810 vehicles. The majority of deliveries comprised Tesla Model 3 and Model Y vehicles, amounting to 369,783 units, while other models like the Cybertruck, Model S, and Model X accounted for 17,027 deliveries.

RBC Capital identified various factors that might have influenced Tesla’s Q1 deliveries, including factory shutdowns at Giga Berlin due to an arson attack, shipping challenges caused by the Red Sea conflict, pre-buy activities in Q4 2023 before the expiration of tax credits for the Model 3 under the Inflation Reduction Act (IRA), and an EV demand slowdown in the United States on Tesla’s deliveries. Additionally, RBC Capital speculated on how an arson attack at Giga Berlin affected Tesla’s production capabilities and delivery timelines.

Looking ahead, RBC Capital forecasts that by 2035, Tesla will sell approximately 2.5 million vehicles annually in North America, 800,000 in Western Europe

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