There may be trouble ahead for electric vehicle giant Tesla (NASDAQ:TSLA), and it’s starting to drag on the share price. Between issues of the planned robotaxi, along with a shift in its own master plan that potentially reflects losses, that’s got investors wondering if they should pull out while they still can. And Tesla shares were down nearly 2% in Thursday afternoon’s trading in reflection of this development.
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First came word from Tom Narayan, an analyst with RBC Capital Markets, who pointed out that cities are going to be trouble for Tesla’s robotaxi plan. Sufficient trouble, in fact, that he cut RBC’s price target on Tesla from $293 to $227 per share.
While making a robotaxi actually happen wasn’t going to be so much of a problem, Narayan notes, making it actually fit into cities would take a lot of infrastructure retooling that no one could really afford to engage in. Thus, many cities might not undertake the move, especially with so many alternatives freely available from ride-sharing operations and public mass transit.
Master Plan Upheaval
Meanwhile, another major issue is cropping up for Tesla: huge competition in the electric vehicle market, particularly from China, where a growing number of inexpensive electric vehicles are coming up. Reports suggest that Master Plan 4, currently in the works at Tesla, may be taking shape around the notion that China has essentially won the race for affordable electric vehicles. Now, Tesla may be less about electric vehicles going forward and more about AI, robotics, and computing systems.
Is Tesla a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 10 Buys, 14 Holds, and nine Sells assigned in the past three months, as indicated by the graphic below. After a 30.11% loss in its share price over the past year, the average TSLA price target of $176.96 per share implies 2.07% downside risk.
