🚨 Deutsche Bank raised its price target for $TSLA to $420 from $370 on expected growth in robotaxis, robotics, and a rebound in vehicle deliveries in 2025

“Tesla’s valuation is now clearly embedding a higher degree of success for robotaxi based on our multi-modal framework,” analyst wrote. 

Tesla's FSD v13 shows significant improvements, and a robotaxi service deployment in California and Texas is anticipated in the second or third quarter, on the back of its AI capabilities.

Vehicle deliveries are forecast to grow 15% in 2025, driven by new models, including the "Model Q," and refreshed designs. However, first-quarter deliveries may fall below consensus due to minimal contributions from new models.

Tesla's gross margins are expected to face pressure as pricing actions and incentives drive volume growth. The brokerage forecasts auto gross margins at less than 18% for 2025, or about 14% excluding credits.

Deutsche Bank also noted a faster ramp for Tesla's Optimus humanoid robot, with plans for in-plant use and a potential production surge in the coming years.

The brokerage also noted risks, including EV demand softness, regulatory scrutiny of AI deployments, and leadership concerns tied to Elon Musk.

Deutsche Bank maintained its "BUY" rating on the stock.