Tesla in Crisis... Another Downgrade of Investment Opinion on Wall Street

Concerns continue to surround Tesla, the world's largest electric vehicle company. With its stock price plummeting more than 30% since the beginning of the year, Wall Street has once again downgraded its investment rating, citing a slowdown in electric vehicle demand. There is also analysis suggesting that Toyota of Japan will soon snatch the 'crown of the largest automobile company by market capitalization.'

Tesla Stock Price Trend This Year

On the 25th (local time), according to Barron's and others, Mizuho downgraded its investment rating on Tesla from buy to neutral. The target price was also sharply lowered from the previous $270 to $195. Mizuho analyst Vijay Rakesh explained, "The long-term electric vehicle environment remains constructive, but in the short term, facing a slowdown in electric vehicle demand and liquidity tightening, difficulties will arise in 2025."

Recently, investment sentiment surrounding Tesla, the leading electric vehicle stock, has been deteriorating on Wall Street. The growth momentum of the electric vehicle market has weakened, and a public warning during the early-year earnings announcement that "growth rates will noticeably decline" dealt a direct blow. Earlier in early March, Wells Fargo downgraded Tesla's investment rating to underweight (sell) and lowered the target price to $125. Goldman Sachs lowered it from $220 to $190, and UBS from $225 to $165.

This subdued investment sentiment is also confirmed by Tesla bulls. Adam Jonas, a prominent Tesla bull and Morgan Stanley analyst, warned in an investor memo that Tesla's market capitalization will fall below that of Japan's Toyota. This means Tesla's stock price could drop to $120 per share, 30% lower than the current level.

He said, "The difference between the two companies reflects changes in global consumers observing the slowdown in electric vehicle sales," adding, "Tesla will return the crown of the world's most valuable automobile company to Toyota." Since the beginning of this year, Toyota's stock price has surged 50%, while Tesla's has plunged more than 30%. Tesla's decline is the largest among all S&P 500 index stocks.

On the same day, David Kostin, chief strategist at Goldman Sachs, also pointed out that among major big tech companies, all except Tesla are at the top of long (buy) positions, indicating that Tesla has fallen out of favor with Wall Street hedge funds.

Currently, Wall Street expects Tesla's first-quarter delivery results, to be released early next month, to fall short of expectations. According to FactSet, the current consensus on Wall Street is 481,000 units. Recently, Bloomberg reported that Tesla is reducing production days at its China factory from 6.5 days per week to 5 days. On this day, Mizuho forecasted that the electric vehicle market will grow only 15% this year compared to the previous year, a significant downgrade from the prior 25% growth outlook. The firm also downgraded its investment ratings on Rivian and NIO along with Tesla.

Meanwhile, despite the downgrade in investment ratings, Tesla's stock price in the New York stock market closed at $172.63 per share, up more than 1% from the previous session, buoyed by positive news of cooperation with China's CATL.

This content was produced with the assistance of AI translation services.