Demand issues, Twitter focus creates ‘perfect storm’ for Tesla, says Wedbush

Wedbush analyst Daniel Ives notes that the major selloff in Tesla (TSLA) stock post softer Q4 deliveries was clearly an ominous start for the company to kick off 2023 after a horrific 2022 for the stock with a black cloud now forming over the story. The major worry now overhead for Tesla is that the demand story especially out of China is showing heavy cracks in the armor at a time that EV competition is steadily increasing domestically with NIO (NIO), Xpeng (XPEV), and others fighting for a smaller pie with the Chinese consumer weakening, Ives argues. With China representing 40%-plus of the global growth story for Tesla, this is a heavy concern for the Street which will likely result in more significant price cuts over the coming months to spur demand as a potential pricing war takes place to gain market share in a darker macro backdrop, he adds. The analyst believes the demand issues combined with Musk’s Twitter focus creates a "perfect storm." He has an Outperform rating on Tesla’s shares with a price target of $175.