Tesla (NASDAQ: TSLA) reported its first-ever annual decline in vehicle deliveries recently, falling to 1.79 million in 2024 from 1.81 million in the previous year. This drop was attributed to increasing competitive pressures and operational hurdles. The electric vehicle leader contends with formidable rivals such as Hyundai, BYD, General Motors, and Ford.
Additionally, Tesla is navigating strategic challenges in Europe and dealing with inventory issues in North America. These factors have significantly impacted the company’s performance, leading to a noticeable drop in its stock value. Additionally, Bank of America recently downgraded Tesla’s stock from Buy to “Neutral,” citing certain risks.
Bank of America Downgrades Tesla
In light of the recent delivery figures, Bank of America has downgraded Tesla’s stock from Buy to Neutral, citing considerable execution risks and concerns over its current valuation. Despite this downgrade, the bank has raised its price target for Tesla from $400 to $490, pointing to the potential impact of Tesla’s anticipated robotaxi service on its overall valuation.
Following the downgrade and delivery announcement, Tesla’s stock experienced a significant decline, with the current price at $392.91. The stock opened at $405.81, with a day low of $391.50 and a high of $414.33. Over the past year, Tesla’s stock has fluctuated between a low of $138.80 and a high of $488.54.
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Tesla Stock Brief
Tesla is focusing on expanding its market reach by planning to introduce more affordable and autonomous vehicles in 2025. The company aims for a growth rate of 20-30% in the coming years. Additionally, Tesla has achieved a notable milestone in energy storage, deploying 11.0 GWh in the fourth quarter of 2024.
This achievement underscores Tesla’s commitment to diversifying its offerings beyond electric vehicles. However, the company’s strategic plans are not without challenges. CEO Elon Musk’s political involvement, particularly his support for President-elect Donald Trump, has been viewed as a potential distraction from Tesla’s core business operations.
Tesla’s recent stock performance reflects the market’s cautious stance amid these developments. The stock’s recent closing prices have shown considerable volatility, with significant fluctuations in December 2024 and early January 2025. Notably, the stock closed at $411.05 on January 6, 2025, before dropping to $392.91 the following day.
Analysts have issued a Hold recommendation for Tesla, with a recommendation mean of 2.77. The target price for Tesla’s stock varies widely, with a high of $528.00 and a low of $120.00, indicating mixed investor sentiment about the company’s future prospects.
Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.
About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
