Wells Fargo: Tesla's delivery profit is both weak, Cybercab's dystocia triggers target price cut in half to $130

April 2,Wells FargoThe latest research report was released on Tuesday, announcing theTeslaThe stock rating was downgraded from "neutral" to "underweight", and the target price was cut in half to $130, a 51% drop from Tuesday's closing price of $268.46. Colin Langan, the bank's star analyst, and his team continued to predict a decline in Tesla's delivery growth and expect price cuts to impact the company's margins. Tesla stock has been added to Wells Fargo's list of tactical ideas given the potential slide in the stock price.

The report pointed out that as the penetration rate of electric vehicles in the United States and Europe approaches saturation and the price war between Chinese local brands intensifies, Tesla has lacked effective means to stimulate sales in the short term. In particular, it warned that if the Biden administration cuts the electric vehicle tax credit policy by $7,500 in the second half of the year, it will further suppress demand.

In response to competition, Tesla's global price reduction strategy is eating profits. The bank predicts that earnings per share (EPS) will plummet by 25% year-on-year in 2025, and gross profit margins may fall below the key support level of 20%, more than half from last year's historical high of 31%.

Regarding the Robotaxi driverless taxi business that Musk has high hopes for, the report raises sharp questions: the Autopilot system, which relies entirely on visual solutions, has major security vulnerabilities, and the delivery of the Cybertruck mass-produced at the Austin Gigafactory has been delayed many times. Langen particularly emphasized that "if a commercial fleet cannot be set up before June, market confidence may be hit hard".

It is worth noting that although Tesla's stock price bucked the trend and rose 6.2% on Tuesday, it still fell 37% during the year, which is nearly 40% lower than last year's historical high of $488.54.