Investor's Corner
Tesla dips amid ‘meager’ Model 3 demand claims despite TSLA’s China, Europe push
Tesla stock (NASDAQ:TSLA) dropped to nearly 5-month lows on Monday, trading as low as $256.02 per share, the lowest since October 22, 2018. The drop in the electric car maker’s shares transpired amidst Wall St’s continued concerns over alleged Model 3 demand issues and Elon Musk’s recent initiative to raise the price of Tesla’s inventory vehicles by ~3%.
RBC analyst Joseph Spak recently cut his price target for Tesla shares by $35 to $210 each in a note published on Monday. Spak trimmed his Q1 2019 Model 3 delivery forecasts to 52,500. This number is 4,500 less than Spak’s previous estimates over what he cited as “meager demand” for the electric sedan. Apart from Spak, JMP Securities analyst Joseph Osha lowered his price target for Tesla by 3% to $394 per share. Osha cites the US market’s weakness and Tesla’s closing of its galleries as among the drivers behind his more conservative stance, though the analyst noted that JMP continues to believe in Tesla’s long-term narrative.
“As we have moved through the first part of 2019, it is becoming apparent that Tesla’s efforts to pull demand into 4Q before the federal tax credit expired worked well, perhaps better than the company had planned. Indeed, based on our analysis we are not sure that U.S. demand will return to 4Q18 levels at any point this year. It is worth reiterating that our investment stance on Tesla has always been based on the potential the company has to make competitive gains over time. The undeniably challenging environment that Tesla faces at the moment is not enough to impact our fundamental stance on the company and its prospects,” Osha wrote.
Concerns about the Model 3’s weakening demand might be overblown, especially considering that Tesla is currently focusing its push for the vehicle in territories outside the United States. This is a key point that seems to be neglected in recent mainstream analysis of the company’s strategy this quarter, as revealed in a recent piece on Model 3 demand from The New York Times. Citing new-car registrations compiled by the Dominion Cross-Sell Report, which concluded that new Tesla registrations “fell significantly” in the 23 US states covered in the report, the publication suggested that the numbers are a worrisome sign for the electric car maker.
While the NYT‘s hypothesis with Tesla’s lower registrations in the US should not be discounted, the company’s lower registration numbers could be explained by Tesla simply not delivering as many vehicles in the United States this quarter compared to Q4 2018. Since January, Tesla has been pushing the Model 3 to Europe and China, two markets that have been waiting for the electric sedan. This is a notable contrast to Tesla’s strategy in the fourth quarter, when all of its production and deliveries were focused in North America. Until Tesla reveals its delivery figures in Europe and China on its Q1 2019 production and delivery report, it seems too early to make assumptions about the sedan’s overall demand, or lack thereof.
To be clear, this doesn’t affect Tesla website order prices. Existing inventory prices are currently slightly lower than on website. This will bring them in line.
— Elon Musk (@elonmusk) March 24, 2019
Tesla is nearing the end of Q1 2019, and the company is putting all hands on deck. A recently shared email from Elon Musk has revealed that the CEO is urging the company’s employees to shift their focus on delivering cars to customers, regardless of their role. Musk was optimistic in his message, stating “This is the biggest wave in Tesla’s history, but it is primarily a function of our first delivery of mass manufactured cars on two continents simultaneously, and will not be repeated in subsequent quarters.” Musk has also announced that Tesla is increasing the price of inventory cars worldwide by ~3% on April 1. The changes would not be affecting the current prices of Tesla’s existing vehicles, and is only intended to bring the costs of inventory cars in line.
As of writing, Tesla shares are starting to recover, trading down 1.18% at $261.41 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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