HSBC Sets Grim Price Target for Tesla at $130 Amidst Stiff EV Competition

HSBC has painted a grim picture for Tesla, setting a price target of $130 per share, which is less than half of its current market price.

The bank’s analyst, Michael Tyndall, emphasized that Tesla’s fundamentals remain weak against a backdrop of escalating competition in the electric vehicle (EV) market.

This new valuation aligns with Wall Street’s cautious sentiments as analysts rush to revise their estimates ahead of Tesla’s Q1 delivery results next week. Initial expectations for deliveries stood at 464,000 vehicles, but the consensus has since dropped to around 398,000, with potential further declines looming.

HSBC Sets Grim Price Target for Tesla at $130 Amidst Stiff EV Competition

In a recent update, Tyndall adjusted his estimate for Tesla’s Q1 deliveries to 385,000, with the possibility of it declining to as low as 343,000. He noted that while some of the shortfall can be attributed to the ongoing transition of the Model Y, the erosion of Tesla’s brand, coupled with stiff competition, poses ongoing challenges.

Tyndall speculated that the company’s communication regarding delivery numbers would likely downplay brand concerns, instead attributing issues to temporary factors related to model transitions.

The outlook for Tesla’s long-term growth appears bleak, with projections for vehicle deliveries in 2025 downgraded from over 3 million to approximately 1.9 million—the consensus could fall even further post-delivery announcements.

Additionally, Tesla’s gross margins have been on a downward trend, raising alarms about the company’s financial health. Despite hopes that tariffs will bolster Tesla by making competing EVs pricier, historical data suggests that such increases tend to dampen overall sales.

As Tesla navigates these turbulent waters, shareholders are left contemplating the broader implications of increasing vehicle prices alongside the competitiveness of the EV market—a scenario that might lead to tougher regulatory scrutiny and operational challenges worldwide.