Tesla just got torched by HSBC. On Thursday, analyst Michael Tyndall cut his price target on the company’s stock from $165 down to $130, wiping out $35 in a single blow and forecasting a brutal 52.2% drop from Wednesday’s close.
Tyndall told clients in a note that “there are no quick fixes” for what’s ahead. He blamed the crash outlook on stalled sales, outdated vehicles, and growing competition that’s already chipping away at demand. This downgrade was first reported by CNBC.
Tyndall said the sales slump began before the brand started taking hits in the press. He warned that Tesla’s old product lineup, paired with weak assisted-driving features, is killing momentum in China, where local competitors are running laps around them.
He also said Tesla has failed to win over European fleet buyers, who account for 60% of the market. Unlike most carmakers, Tesla doesn’t adjust its list prices often, rarely updates models, and avoids facelifts. That strategy might’ve worked it they had the edge, but Tyndall said it’s now turning against the EV maker as other companies catch up.
Robotaxi delays and global competition drag Tesla down
Tyndall also warned that Tesla’s robotaxi plans are nowhere near ready. He cited a crowd-sourced progress tracker from earlier this month showing the company’s autonomous driving tech is “slow or stagnating.” He added, “Delays have been a constant theme at Tesla, whereas the competitive threats continue to grow. We see a longer and less certain timeline than the current valuation reflects.”
Even after a 9.3% rally earlier this week, Tesla stock is still down more than 32% this year. Since President Donald Trump began his second term in January and brought Elon Musk into the White House, the company’s shares have dropped 36%. The biggest single-month fall came in February, when Tesla lost 28%, its worst since December 2022.
The market hasn’t been stable. On 14 different trading days this year, the stock has moved at least 5%, either up or down. This week’s drop followed a five-day winning streak, which included a 12% spike on Monday. But volatility hasn’t helped calm investor nerves.
Right now, Wall Street is split. Out of the 54 analysts covering the company, 26 still rate it a buy or strong buy, 16 say hold, and 12 have either a sell or underperform call, according to LSEG data.
Then on Tuesday, the European Automobile Manufacturers’ Association (ACEA) reported that Tesla saw a 40% year-over-year drop in February vehicle registrations in Europe, even as battery EV sales rose 26% across the board. So not only is Tesla falling behind, but the rest of the industry is still growing.
After that report, analysts at RBC said the drop represented around 11,000 fewer car registrations but added that the number might not show real demand. They wrote that some buyers might just be holding out for the Model Y refresh or a new low-cost model expected in the second half of the year.
Model Y upgrades, political blowback, and Trump’s tariffs stir chaos
Right now, Tesla is trying to ramp up production of a refreshed Model Y SUV, set for launch next month. The company shut down parts of its manufacturing plants earlier this year to upgrade the production lines. But that hasn’t been enough to stop the bleeding.
On Wednesday, the White House announced that President Trump plans to hit all auto imports with 25% tariffs, saying the move could come before his widely hyped “liberation day” on April 2. He told reporters the tariffs could be “net neutral or they may be good” for Tesla since the company already builds cars in Texas and California. Trump also said Musk, who serves as a senior advisor, hadn’t commented on the tariffs because “he may have a conflict.”
Trump praised Tesla during an event at the White House South Lawn earlier this month, where the lawn was temporarily turned into a Tesla showroom. Five cars were delivered for inspection, and Trump said he would buy one to show support for the company. Standing next to Musk, he called the Cybertruck “beautiful” and praised its sharp, steel design.
Musk has been deeply tied to Trump’s current administration. He donated $290 million to help fund the campaign and is now running the newly formed Department of Government Efficiency (DOGE). The goal: cut federal spending, reduce the government workforce, and privatize as many agencies as possible—including Social Security.
But the politics are starting to hit the company hard. William Blair analysts wrote Wednesday that Musk’s role in the government and his political views have caused “brand damage and even vandalism” at a time when Tesla’s supply is already limited due to the Model Y changeover and pressure from Chinese EV makers. The firm still lists Tesla as a buy, pointing to potential in energy storage and robotaxi revenue, but its note came with serious warnings.
Musk has promised to launch a robotaxi service in Austin in June, but production hasn’t started on the dedicated robotaxi vehicle, called the Cybercab. Meanwhile, Alphabet’s Waymo is already running commercial robotaxi services in Austin and other cities.
In China, several automakers now offer driver-assist features similar to Tesla’s Full Self-Driving Supervised as standard, instead of making it a paid extra. Trying to keep up, Tesla quietly rebranded its own system this week, changing its name to “Intelligent Assisted Driving,” as reported by CNEVPost. But even with the new name, the system still needs a human driver ready to take control at any moment.
As Trump pushes forward with his tariff plan, Tesla sent a letter to the U.S. Trade Representative, warning that the company still relies on some parts that can’t be sourced inside the country, even with an aggressive push to localize its supply chain. The company wrote, “Even with aggressive localization, certain parts and components are difficult or impossible to source within the United States.”
They urged the USTR to take a step back and “consider the downstream impacts” of any trade actions taken in response to what the government sees as unfair foreign practices.
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