TSLA gets worse before it gets better. Really?
Here’s the situation.
As of 27 Mar 2025, $Tesla Motors(TSLA)$ is facing significant challenges.
Sales dropped -31% YoY in California in January and -43% in Europe in the first 2 months of 2025.
In China, sales decreased by -29% through February 2025.
In terms of stock price, it has plummeted by -30.5% YTD.
Falling From Grace.
To make matters worse:
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$BYD Co., Ltd.(BYDDY)$ has surpassed Tesla in revenue in 2024.
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However, Model Y remained the best-selling EV in China last year.
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This despite, BYD's vehicles like Seagull hatchback ($16,000) costs less than Model Y ($50,500) or Model 3 (approx. $32,000) and its new battery technology and self-driving systems are outpacing Tesla's offerings,
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To sustain sale, Tesla is offering Chinese customers free trial of FSD (autonomous driving), when it charges $12,000 for it in the U.S.
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In January 2025, EV sales in US surged by +14%, while Tesla’s sales fell by -11%.
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Interest in Tesla has decreased by -7% from 2024, with the Cybertruck sold about 40,000 units only.
Anti-Musk sentiments.
In addition to competitive pressures, Tesla is dealing with backlash against CEO Elon Musk.
His penchant for controversial actions has sparked protests, damage (what’s left of) the Tesla brand reputation and come back to bite him in the ass.
Failure To Transform ?
Musk's plans to pivot Tesla into (a) AI and (b) robotics face skepticism.
Tesla's attempts to pivot into (1) AI and (2) robotics, face challenges, compounded by both external competition and internal missteps, threatening its position in the global EV market
Not to mention strong competitors like (i) Waymo and (ii) Boston Dynamics, both leaders in those fields.
Analysts have reduced it's price target, sales targets, and the company's recent product releases, like the Cybertruck, have underperformed. (see below)
On 27 Mar 2025, $HSBC Holdings PLC(HSBC)$ analysts, Michael Tyndall remarked: (see above)
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Reduced Tesla's price target to $130, warning of a potential decline of over -50% due to persistent headwinds.
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Deeper-rooted issues exist in Tesla's business beyond recent brand concerns.
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It is facing stiff competition in China, due to (a) aging vehicle models and (b) limited driving-assistance features.
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On 13 Mar 2025, $JPMorgan Chase(JPM)$ Cut Tesla's price target to $120 per share, from $135.
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This was carried out in anticipation of a 2nd consecutive year of declining EV deliveries
Further back on 10 Mar 2025, $UBS Group AG(UBS)$ lowered Tesla's price target to $225 from $259, citing weak Q4 2024 earnings and decreased delivery estimates for Q1 2025.
With US market expected to continue to consolidate this week especially on 02 Apr 2025 when Round #2 of tariffs kicks in, everyone needs to adopt a “brace” position.
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Do you think Tesla will really fall to the $1XX level as predicted by financial institutions ?
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Do you think US market will consolidate further this week, as more economic reports are due ?
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