HSBC Lowers Tesla Price Target to $130

HSBC analyst Michael Tyndall lowered the price target on Tesla (NASDAQ: TSLA) to $130 (from $165) while maintaining a Reduce rating.

“The seeds for the current sales weakness pre-date the recent brand issues.

Slashing list prices (in December 2022) put European fleet buyers offside; a significant issue given they represent 60% of the new car market.

Aging products with limited driving assistance have been an ongoing headwind in China and, although the new Model Y should help, the refresh on the Model 3 back in 4Q 2023 saw a relatively short-lived benefit.

Tesla eschews many of the industry norms (holding list prices firm, making regular facelifts and model renewals) and has to date seen only minimal impact, but tougher competition and brand erosion is likely to see the impact of its strategy hurt more.

Management was clear that Q1 would be tough given all factories would switch production to the new Model Y in a matter of weeks.

The media suggests the sales issue is not just the Model Y changeover, but it is hard to tell.

If March sales represent the ‘usual’ portion of Q1, then 1Q 2025 volumes look to be coming in at c385k – c4% below current VA consensus.

However, if the month records the same proportion of Q1 as last year, then volumes could be as low as 343k. That would assume no boost from the new Model Y, which is probably unlikely.

We suspect the messaging at Q1 will be that the issues are temporary and the future remains bright. We doubt brand issues will be discussed.”

This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.