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.

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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.

Electrek’s Take

To summarize Jonas’ positive view on Tesla, he believes that it doesn’t matter that its main business (selling cars) is crumbling 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 considerable advantage over the competition, like Unitree, which actually looks to be ahead of Tesla.

Tesla’s main business is still selling cars. That’s not going well, and even Jonas admits it.

He sees Tesla’s deliveries going down two years in a row while gross margins are crashing even faster.

Sure, he also sees Tesla increasing deliveries later this decade, leading to 4 million deliveries in 2030, but that’s purely based on Tesla’s demand picking back by solving self-driving, which again is unlikely.

His prediction for 2030 is also down from 5 million units and Musk himself had recently predicted 20 million units in 2030.

It all sounds pretty ridiculous at this point.

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