Tesla's Future Hinges On China FSD: Goldman Sachs

Core Viewpoint - Goldman Sachs analyst Mark Delaney maintains a Neutral rating on Tesla Inc with a price forecast of $235, emphasizing the importance of Tesla's Full Self Driving (FSD) software in China for future stock performance [1]. Group 1: Market Position and Performance - China is the largest car market globally and has become Tesla's biggest market for new vehicle sales over the past year, attributed to higher BEV penetration rates [2][3]. - Tesla's market share in the U.S. BEV market has decreased to approximately 45%, while its share in Europe has fallen to the low double-digit range; however, its share in China remains stable in the high single-digit range [4]. Group 2: Full Self Driving (FSD) Software - Tesla has updated its FSD software for users, introducing features like automatic lane change and traffic light detection, and plans to launch supervised FSD in China with minimal local-specific data [5][6]. - FSD has performed relatively well in China despite limited data collection, though some reviews indicate issues with local traffic rules and lane usage [7]. - The competitive landscape in China includes many local competitors offering ADAS features as standard, making the technology and cost improvements of Tesla's FSD crucial for its long-term success [8]. Group 3: Future Prospects and Financials - Tesla aims to offer robotaxi services, starting in Texas in June 2025, with a competitive cost structure, as the global cost of goods sold per vehicle was about $35.5K in Q1 2025 [10]. - If Tesla enters the robotaxi market in China, it will face a competitive environment with various autonomous vehicles at attractive costs, with technology development, scale/cost, and regulatory approvals being key factors for success [11]. - Delaney projects Tesla's fiscal 2025 revenue at $93.17 billion and EPS at $1.20 [11].