The first quarter of the year is about to end, and although Tesla's financial report has not been published, there is widespread concern about Tesla's performance. Recently, Wells Fargo decided to add Tesla to its short-sell list, clearly doubting the upcoming financial reports and anticipating a significant drop in stock price upon their release.
Several analysts believe Tesla's financial report may not look "good" because Tesla had a challenging first quarter. Limited by production capacity and heightened competition in the Chinese market, Tesla faced significant challenges. With the electric vehicle industry becoming increasingly competitive and early signs of a price war emerging, these factors are likely to further complicate Tesla's situation.
HSBC recently reiterated its downgrade rating on Tesla's stock and set a target price of $143, while also lowering its forecast. They explained that Tesla's price cuts in an attempt to win back the market are not always effective. Getting caught in a price war results in a lose-lose, or even worse, situation where the price reduction is unlikely to save Tesla's sales.
Moreover, Citibank also expressed pessimism about Tesla's outlook, reducing the target price from $224 to $196 while maintaining a "neutral" rating on the stock. Although this is relatively more positive compared to the others, it still reflects a negative outlook. Citibank predicts that Tesla's first-quarter deliveries will be adjusted down from 473,300 units to 429,900 units.
Wells Fargo is undoubtedly one of the most pessimistic, believing that Tesla will not be able to maintain its previous momentum and may even regress under the impact of emerging car manufacturers. Faced with an increasingly adverse situation, Tesla has no solution except for drastic price reductions, which similarly fail to rescue Tesla. Consequently, Tesla's delivery growth rate has begun to slow down recently.
