Investor's Corner
Classic Tesla bear thesis gets revived with Goldman Sachs’ latest Sell rating
Just a little over a week after Elon Musk walked away from Tesla’s privatization deal, Goldman Sachs has resumed its coverage of the company. With this renewed coverage comes a strong Sell rating, citing increasing competition from rival carmakers as a reason behind a possible decline in Tesla’s share in the EV market.
A recent note penned by Goldman Sachs analyst David Tamberrino stated that the financial firm believes Tesla stock (NASDAQ:TSLA) would drop 30% in the next 6 months due to the arrival of competing electric vehicles over the next few years. Amidst the release of Goldman Sachs’ note, Tesla shares have taken a 3% drop during Tuesday’s intraday.
“We see the medium-to-longer term industry backdrop as challenging for Tesla’s products; this follows from an increasing number of EV launches from both traditional OEMs and other start-up competitors — at a time when the company’s product cadence hits a gap. We believe the company will see pressure to its lead in EVs as competition catches up,” Tamberrino wrote.
The Goldman Sachs analyst provided a list of some of the electric car makers he believes would be a legitimate threat to Tesla, among them vehicles from BMW, Jaguar, and Porsche, as well as other legacy carmakers that have pledged to release electric cars over the next few years.
“With regional mandates and tightening CO2 standards, both traditional and new entrants are expected to launch several EVs in the coming years — with a large crescendo in the early-to-mid 2020s. Altogether, we remain bearish on the company’s ability to execute, achieve its targeted production ramp/margins, and sustain FCF [free cash flow] generation,” Tamberrino wrote.
It should be noted that the Goldman Sachs analyst has maintained a firm Sell rating on Tesla for a while now. David Tamberrino, for one, has kept his Sell rating on the company since last year, partly causing his rankings in websites such as the TipRanks to suffer. So far, Tamberrino has an average return of -9.0, ranking him as #4,553 out of 4,875 among TipRanks‘ list of Wall St. analysts.
The idea of rival car companies coming up with “Tesla Killers” has been around for a very long time, and over the years, these vehicles have taken many forms. Last year, it was the Chevy Bolt EV being hailed as the Model 3 killer. This year, it’s the Jaguar I-PACE. Next year, it will probably be the Porsche Taycan.
While it is true that these vehicles are legitimate competition for Tesla’s electric cars in terms of quality and performance, their usually limited production numbers prevent them from actually having a shot at toppling the Model S, X, and 3 from their spots at the top of the premium EV market. Chevy, for one, has not really pushed the production of the Bolt this year, Jaguar is reportedly planning to produce up to 30,000 units of the I-PACE annually, and Porsche has revealed that the initial production of the Taycan would be at 20,000 cars per year. Tesla, even at its present state where it is still refining its Model 3 production, is looking to produce around 50,000-55,000 Model 3 this Q3 2018. That’s practically the planned annual production of the Taycan and the I-PACE combined.
Besides, the idea of electric cars “killing” an electric car maker is flawed at its core. Tesla’s electric vehicles, after all, are a step towards sustainability. Thus, if other manufacturers are designing their electric cars in the same way that Tesla is, then they should not be releasing vehicles that are designed to “kill” other electric cars — they should be creating vehicles that are designed to “kill” gas and diesel-powered automobiles.
As of writing, Tesla shares are trading down 3.25% at $291.70 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Tesla bear Michael Burry got blunt with his beliefs over the company’s valuation, which he called “ridiculously overvalued” in a newsletter to subscribers this past weekend.
“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Burry, who was the inspiration for the movie The Big Short, and was portrayed by Christian Bale.
Burry went on to say, “As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots — until competition shows up.”
Tesla bear Michael Burry ditches bet against $TSLA, says ‘media inflated’ the situation
For a long time, Burry has been skeptical of Tesla, its stock, and its CEO, Elon Musk, even placing a $530 million bet against shares several years ago. Eventually, Burry’s short position extended to other supporters of the company, including ARK Invest.
Tesla has long drawn skepticism from investors and more traditional analysts, who believe its valuation is overblown. However, the company is not traded as a traditional stock, something that other Wall Street firms have recognized.
While many believe the company has some serious pull as an automaker, an identity that helped it reach the valuation it has, Tesla has more than transformed into a robotics, AI, and self-driving play, pulling itself into the realm of some of the most recognizable stocks in tech.
Burry’s Scion Asset Management has put its money where its mouth is against Tesla stock on several occasions, but the firm has not yielded positive results, as shares have increased in value since 2020 by over 115 percent. The firm closed in May.
In 2020, it launched its short position, but by October 2021, it had ditched that position.
Tesla has had a tumultuous year on Wall Street, dipping significantly to around the $220 mark at one point. However, it rebounded significantly in September, climbing back up to the $400 region, as it currently trades at around $430.
It closed at $430.14 on Monday.
Investor's Corner
Mizuho keeps Tesla (TSLA) “Outperform” rating but lowers price target
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected.
Mizuho analyst Vijay Rakesh lowered Tesla’s (NASDAQ:TSLA) price target to $475 from $485, citing potential 2026 EV subsidy cuts in the U.S. and China that could pressure deliveries. The firm maintained its Outperform rating for the electric vehicle maker, however.
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected. The U.S. accounted for roughly 37% of Tesla’s third-quarter 2025 sales, while China represented about 34%, making both markets highly sensitive to policy shifts. Potential 50% cuts to Chinese subsidies and reduced U.S. incentives affected the firm’s outlook.
With those pressures factored in, the firm now expects Tesla to deliver 1.75 million vehicles in 2026 and 2 million in 2027, slightly below consensus estimates of 1.82 million and 2.15 million, respectively. The analyst was cautiously optimistic, as near-term pressure from subsidies is there, but the company’s long-term tech roadmap remains very compelling.
Despite the revised target, Mizuho remained optimistic on Tesla’s long-term technology roadmap. The firm highlighted three major growth drivers into 2027: the broader adoption of Full Self-Driving V14, the expansion of Tesla’s Robotaxi service, and the commercialization of Optimus, the company’s humanoid robot.
“We are lowering TSLA Ests/PT to $475 with Potential BEV headwinds in 2026E. We believe into 2026E, US (~37% of TSLA 3Q25 sales) EV subsidy cuts and China (34% of TSLA 3Q25 sales) potential 50% EV subsidy cuts could be a headwind to EV deliveries.
“We are now estimating TSLA deliveries for 2026/27E at 1.75M/2.00M (slightly below cons. 1.82M/2.15M). We see some LT drivers with FSD v14 adoption for autonomous, robotaxi launches, and humanoid robots into 2027 driving strength,” the analyst noted.
Tesla stock (NASDAQ: TSLA) has landed an elusive “must own” status from Wall Street firm Melius, according to a new note released early this week.
Analyst Rob Wertheimer said Tesla will lead the charge in world-changing tech, given the company’s focus on self-driving, autonomy, and Robotaxi. In a note to investors, Wertheimer said “the world is about to change, dramatically,” because of the advent of self-driving cars.
He looks at the industry and sees many potential players, but the firm says there will only be one true winner:
“Our point is not that Tesla is at risk, it’s that everybody else is.”
The major argument is that autonomy is nearing a tipping point where years of chipping away at the software and data needed to develop a sound, safe, and effective form of autonomous driving technology turn into an avalanche of progress.
Wertheimer believes autonomy is a $7 trillion sector,” and in the coming years, investors will see “hundreds of billions in value shift to Tesla.”
A lot of the major growth has to do with the all-too-common “butts in seats” strategy, as Wertheimer believes that only a fraction of people in the United States have ridden in a self-driving car. In Tesla’s regard, only “tens of thousands” have tried Tesla’s latest Full Self-Driving (Supervised) version, which is v14.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
When it reaches a widespread rollout and more people are able to experience Tesla Full Self-Driving v14, he believes “it will shock most people.”
Citing things like Tesla’s massive data pool from its vehicles, as well as its shift to end-to-end neural nets in 2021 and 2022, as well as the upcoming AI5 chip, which will be put into a handful of vehicles next year, but will reach a wider rollout in 2027, Melius believes many investors are not aware of the pace of advancement in self-driving.
Tesla’s lead in its self-driving efforts is expanding, Wertheimer says. The company is making strategic choices on everything from hardware to software, manufacturing, and overall vehicle design. He says Tesla has left legacy automakers struggling to keep pace as they still rely on outdated architectures and fragmented supplier systems.
Tesla shares are up over 6 percent at 10:40 a.m. on the East Coast, trading at around $416.
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