Tesla’s stock took a sharp dive this week, falling 5.6% to close at $263.45 on Thursday. The drop came after investment firm Baird cut its price target for the electric vehicle giant, citing weak sales in key markets and growing concerns over demand.
Why Did Baird Cut Tesla’s Price Target?
Baird analyst Ben Kallo revised Tesla’s price target from $440 to $370, pointing to issues that could hurt the company’s first-quarter performance. Tesla is aiming to deliver between 425,000 and 435,000 vehicles this quarter, but Kallo believes those numbers may be unrealistic.
Sales in China and Europe, two of Tesla’s biggest markets, have been falling. The company also had production slowdowns as it worked on updating the Model Y. To make things more complicated, Elon Musk’s political controversies have also raised concerns about Tesla’s public image, possibly affecting consumer interest.
Despite the challenges, Baird still maintains a ‘Buy’ rating for Tesla, arguing that its advancements in AI and self-driving technology will keep it strong in the long run.
Tesla Sales Are Dropping in Key Markets
The biggest red flag for investors right now is Tesla’s declining sales in major global markets.
- In China, Tesla’s sales of China-made EVs dropped 49% year-over-year in February. The company is struggling to compete with local electric car manufacturers, who are offering cheaper alternatives.
- In Germany, Tesla sales fell 76% in February.
- Across Sweden, Norway, and Denmark, registrations were down 42-48%.
- In France, sales dropped 26% last month.
With numbers like these, analysts are growing increasingly cautious about Tesla’s future growth.
What Are Analysts Saying?
Tesla is still one of the most talked-about stocks on Wall Street, but analysts are divided on where it’s headed next.
Dan Ives from Wedbush remains bullish, with a high price target of $550 per share. He believes the political drama surrounding Elon Musk won’t affect Tesla as much as people think maybe just 5% of sales. He also sees Tesla’s future in AI and self-driving technology pushing the company’s value beyond $2 trillion.
On the other hand, analysts at Bank of America are more cautious. They see Tesla facing slower growth, competition from cheaper Chinese EVs, and delays in launching its low-cost EV and Robotaxi.
Tesla’s Stock Performance So Far
Tesla’s stock has had a rough start to 2024. The company’s shares have dropped about 31% this year, performing worse than competitors like General Motors and Ford.
Should Investors Be Worried?
Tesla is at a critical moment. The company is still a leader in the EV market, but demand uncertainties, competition, and production challenges are making investors nervous. While some analysts still see long-term potential, short-term concerns have led to price target cuts and a dip in stock value.
Investors will be watching closely to see if Tesla can bounce back or if this is the beginning of a bigger decline.
