Investing.com -- In a note Wednesday, Wolfe Research outlined three major drivers that could shape Tesla’s performance over the next 12 to 18 months, even as the firm’s near-term earnings estimates remain below Wall Street consensus.

While Wolfe maintained its focus on Tesla’s longer-term artificial intelligence and autonomy potential, it flagged key near-term developments that could swing the stock.

The first is U.S. auto pricing power. “Following the Trump Admin’s latest EO, we believe TSLA can effectively offset their Auto tariffs to zero for 2025 & 2026,” Wolfe said.

The firm explains that the pricing umbrella could prove favorable as rivals absorb an estimated $2,000 to $6,000 per vehicle in new costs. Wolfe assumes U.S. pricing will remain stable through 2026.

Second is the ramp of Tesla’s affordable lineup. While Wolfe’s 2025 delivery estimate of 1.63 million vehicles includes only 26,000 lower-cost models, the firm expects margins to “improve quickly, given limited incremental fixed costs.”

The third factor is battery costs in Tesla’s energy segment. Wolfe said that “Megapack & Powerwall rely on LFP cells from China,” but noted this will shift as Tesla (NASDAQ: TSLA ) ramps up local cathode and lithium refining in the U.S.

Still, Wolfe estimated that “~50% of future US LFP cell content will still come from China,” keeping battery costs elevated if tariffs persist.

Looking further out, Wolfe said, “Tesla’s AI opportunity remains the most important structural driver.”

The firm sees the upcoming robotaxi pilot in Austin as a key milestone. “Success in Austin could bolster confidence in future deployments in 2026 / 2027,” Wolfe added, estimating that autonomy alone could contribute $125 to $145 per share in value.

Wolfe’s updated EPS estimates for Tesla stand at $1.83 for 2025 and $2.50 for 2026, both below consensus. The firm maintained a Peer Perform rating on Tesla.