Wells Fargo has reiterated its Tesla price target of $130, painting a bleak picture for the electric vehicle company in the short term. Despite this, not all Wall Street analysts share Wells Fargo’s bearish outlook.
In a recent note, Wells Fargo analyst Colin Langan outlined the factors driving the bank’s pessimistic stance, which could result in a 53% downside from current levels. The firm maintained its “Underweight” rating on Tesla and included the company in its tactical ideas list for the second quarter.
According to Business Insider, Tesla’s stock has fallen 32% year-to-date, with a 44% decline since mid-December. Wells Fargo attributes this drop to a slowdown in vehicle sales across Europe, China, and the U.S., which is weighing on first-quarter deliveries. The bank’s data suggests that deliveries are down 40% in Europe, 14% in China, and 3% in North America through 2025.
The sales slump is in line with broader challenges facing Tesla, including protests related to CEO Elon Musk’s perceived ties to the Trump administration. Musk’s efforts to reduce government spending, such as the DOGE initiative, have faced backlash from the public.
However, not all analysts agree with Wells Fargo’s assessment. Tesla did not aggressively push sales for its popular Model Y vehicle in the first quarter as the company was retooling its gigafactories in preparation for producing an upgraded version of the Model Y.
Wells Fargo warns that the sales decline will significantly impact Tesla’s earnings and believes the company has limited options to stimulate a recovery. The firm points out that Tesla has already lowered prices over the past two years, leaving few strategies to boost demand.
Looking ahead, Wells Fargo anticipates further challenges if the Trump administration eliminates the $7,500 federal tax credit. The bank projects a 25% decrease in Tesla’s earnings per share for 2025 due to lower deliveries and pricing pressures.
Despite these obstacles, some Wall Street analysts see a brighter future for Tesla. Morgan Stanley analyst Adam Jonas predicts a 90% rebound in Tesla’s stock price within the next year, setting a price target of $430. The firm cites Tesla’s Full Self-Driving and robotaxi business as potential catalysts for growth. Additionally, Canaccord reaffirmed Tesla’s price target of $404 after visiting Gigafactory Texas, attributing delivery delays in the first quarter to supply constraints.
In conclusion, while Wells Fargo’s forecast paints a challenging road ahead for Tesla, other analysts see potential for a turnaround based on the company’s long-term prospects. Investors will need to monitor developments closely as Tesla navigates these headwinds in the coming months.