In its quest to pivot from selling EVs to AI and humanoid robots, Tesla has seen his core business get eviscerated.
The company hit a four-year sales low in the United States earlier this year, with no signs of imminent recovery. That’s coming to bear on its share price, which is already down almost 20 percent year to date, signaling that even its notoriously die-hard investors — who have propped up its lofty valuation of well over $1 trillion while its financials have tanked — are starting to get antsy.
Banks are equally unimpressed, with analysts warning that the situation is set to get even worse. Case in point, HSBC stock analyst Mike Tyndall recently reiterated a “reduce” rating on Tesla, which he originally set at the start of the year. As The Street reports, he’s expecting the company’s shares to fall from today’s price of around $365 to just $131 over the next year, an enormous wipeout of over 60 percent — and that’s without getting into the its starry high of $480 or so just last year.
Tyndall argued that Tesla will see immense pressure in the EV industry, especially as the competition continues to grow and markets become more regionalized outside of the US, particularly in Europe and China. He also argued that the company was overestimating global growth opportunities.
Beyond waning EV sales, Tesla is struggling to ramp up production of its two-seater Cybercab, a key component of CEO Elon Musk’s efforts to establish a robotaxi service. The company is looking to start mass production of the vehicle next month, officials told the Wall Street Journal, in a major test of its efforts to pivot away from being a traditional car business.
Tesla is also struggling to get its controversial and misleadingly-named Full Self-Driving advanced driver assistance feature okayed abroad. A key litmus test for the feature is playing out in the Netherlands, where its approval is currently pending. If authorized, the rest of the European Union could follow later this summer, if the company is to be believed.
But that’s far from a guarantee, as Electrek points out. If regulators deny the company’s application, it could signal even more tough days ahead for Musk’s flagship autonomous driving ambitions outside of the US.
All eyes will be on Tesla once it releases its first quarter deliveries on Thursday, with immense pressure on the company to meet Wall Street expectations of a a slight rebound in EV sales year over year.
The pressure is ramping up as international competition continues to tear into Tesla’s once-dominant stance in the EV market. It’s hanging everything on its humanoid robot and robotaxi service, but the clock is ticking for it to turn things around before a stock collapse.
It’s hard to believe that its lagging car business could be enough to save it. Tesla hasn’t sold a new vehicle since its Cybertruck in 2023 — which turned out to be a complete bust.
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