Tesla (TSLA.O), opens new tab dropped for a third day on Wednesday after a prominent Morgan Stanley analyst lowered his price estimate, saying electric-vehicle demand was weakening in crucial regions like China despite steep price drops.
After February's dismal China sales raised concerns about slowing growth and rising competition, Morgan Stanley and other analysts lowered Tesla's delivery outlook.
"China EV market is over-supplied, seeing a barrage of price cuts," stated Adam Jonas, predicting pricing competitiveness this year. "While Tesla may be the most technologically advanced car company in the world, its product line-up may be the oldest of any major OEM (original equipment manufacturer), with nearly all of its lineup launched prior to COVID," stated.
His Tesla share price target dropped from $345 to $320. Later, the shares fell 1.3% to $178.35. Tesla shares have dropped over 11% this week, wiping off almost $70 billion in market value.
In a merciless price war in China, BYD, which has overtaken Tesla as the world's largest EV vendor, cut the price of its cheapest car, the Seagull, by 5% on Wednesday. New, cheaper Teslas won't launch until late next year. It released a redesigned Model 3 compact sedan in the US this year without major outward modifications. Tesla CEO Elon Musk stated the Cybertruck will not be mass-produced until next year.
"Tesla needs a mass market vehicle and the Cybertruck is obviously not going to be that solution," said Tudor Pickering analyst Matt Portillo. He also said Musk hasn't fulfilled his years-long promise of full autonomy, which hurts shareholders. Tesla anticipated "notably lower" deliveries growth in January despite cutting costs for more than a year to boost demand.
In the past year, high borrowing rates have caused buyers to reconsider big-ticket purchases like electric vehicles, adding to concerns about EV costs, charging, and battery range.
Analysts expect Red Sea attacks-related supply chain disruptions, suspected Berlin factory arson, and California plant downtime to prepare for Model 3 manufacturing to slow Tesla's first-quarter deliveries.
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