Tesla shares slip another 4%: what’s going on?

UBS analysts lowered their price target on Tesla to $225 from $259 while maintaining a ‘sell’ rating.

The TSLA stock was down over 4% in pre-market trading on Monday.

Tesla’s market value has fallen around 45% since its record high of $1.5 trillion in December 2024.

The stock had surged following Elon Musk’s financial backing of Donald Trump’s election victory but has since declined amid weaker sales and profits.

Concerns over Musk’s political activities, including his advisory role to Trump, have also weighed on investor sentiment.

Last week, Baird added Tesla as a Bearish Fresh Pick, pointing to production challenges and weakening demand as near-term headwinds.

The firm reduced its price target on the TSLA stock from $440 to $370.

Why UBS lowered Tesla target price?

The revision follows a reduced delivery forecast for the first quarter of 2025, with UBS now expecting 367,000 vehicles, down from the earlier estimate of 437,000.

The analysts cited a slower current run-rate but noted that deliveries could pick up toward the quarter’s end, potentially due to increased promotional efforts.

The revised estimate reflects a 5% year-over-year decline and a 26% drop from the previous quarter, placing UBS’s forecast 13% below the Visible Alpha consensus.

UBS pointed to data from its Evidence Lab, which showed low delivery times for Tesla’s Model 3 and Model Y in key markets, indicating softer demand.

UBS also lowered its first-quarter auto gross margin estimate, excluding credits, to 10.3%, down from 13.6% in the fourth quarter of 2024 and 16.4% in the same period last year.

Tesla’s sales troubles

Tesla’s sales of China-made electric vehicles fell 49.2% year-on-year in February to 30,688 units, marking the lowest monthly figure since August 2022, according to data from the China Passenger Car Association.

The company’s January-February sales totaled 93,926 vehicles, marking a 28.7% decline from the same period last year.

Meanwhile, BYD reported a 90.4% increase in passenger vehicle sales last month, delivering 614,679 units across its Dynasty and Ocean series of EVs and plug-in hybrids.

BYD has further heightened competition by introducing new smart EV models priced below $10,000, prompting automakers like Leapmotor and Geely to introduce more affordable smart EV options.

Tesla’s sales in Europe also dropped significantly in January, with registrations falling nearly 45% to 9,945 vehicles across the EU, UK, and EFTA region, according to data from the European Automobile Manufacturers’ Association.

This marked a two-year low for the automaker in Europe. In Germany, Tesla registered 1,277 vehicles, the lowest since July 2021, while sales in France fell 63%, marking the weakest performance since August 2022.

Tesla’s sales slump in Europe has been attributed in part to consumer resistance following Elon Musk’s recent political views and actions.

The post Tesla shares slip another 4%: what's going on? appeared first on Invezz