Tesla’s stock has taken another major hit, dropping by 4.8% on Tuesday after a nearly identical fall the previous Monday. This marks another tough week for investors as the electric vehicle maker struggles with mounting concerns about its future performance, especially in the key markets of China and Europe.
The latest drop came after RBC analyst Tom Narayan lowered his price target for Tesla shares from $440 to $320. He pointed to disappointing delivery numbers for Tesla in early 2025, particularly in Europe and China, as a key reason for his updated forecast. “Much of the attention around Tesla has centered on its recent delivery performance in Jan. and Feb. in Europe and China,” Narayan wrote. This sluggish start to the year has led Wall Street to revise down its expectations for Tesla’s deliveries in both the first quarter and the full year.
RBC’s downgrade adds to the growing list of analysts adjusting their predictions for Tesla. Mizuho analyst Vijay Rakesh also cut his delivery estimates, predicting that Tesla will deliver only 1.8 million cars in 2025, down from the previously expected 2.3 million. “We believe Tesla’s sales woes are the result of a deterioration in geopolitics, brand perception (US/EU), share loss due to stronger competition (China), and softer-than-expected demand for the Model Y refresh,” Rakesh explained.
In fact, Tesla’s first-quarter delivery expectations are now hovering around 360,000 vehicles, far below the previous forecast of 470,000. For the year, Wall Street initially hoped Tesla would deliver 2 million vehicles, but now that number is closer to 1.8 million. These ongoing revisions are a far cry from the 2024 fourth-quarter record of almost 500,000 cars, making it clear that growth is far from guaranteed.
Adding to Tesla’s challenges is growing competition in the EV space. BYD, a Chinese electric vehicle maker, recently unveiled a groundbreaking ultra-fast charger capable of fully powering a car in just five minutes—roughly twice as fast as Tesla’s current technology. This innovation has caused a surge in BYD’s stock, which rose 4.1% in overseas trading. BYD’s stock is up about 51% this year, reflecting the increasing pressure on Tesla to keep up with its rivals.
BYD’s new technology isn’t the only concern for Tesla. Analysts are also worried about the company’s Full Self-Driving (FSD) system and the rollout of its robotaxi service. Tesla’s FSD has yet to receive approval in China, and it faces mounting competition in the autonomous driving space. In fact, BYD is integrating AI technology from the Chinese startup DeepSeek into its own smart driving systems, putting additional pressure on Tesla to deliver in these key areas.
The challenges don’t end there. Oppenheimer has also reduced its revenue forecast for Tesla, projecting that the company could deliver 30,000 fewer vehicles than previously expected. This drop in projections led the firm to lower its fiscal 2025 revenue estimate by about 2%, down to $97.9 billion.
On top of these operational hurdles, Tesla’s stock is also being dragged down by concerns over CEO Elon Musk’s political activities. His involvement with the Trump administration has led some investors to worry that his focus on Washington, D.C. might be distracting him from the company’s day-to-day needs. These concerns have led to a dramatic decline in Tesla’s stock, which has dropped nearly 41% so far this year and is now on track for its ninth consecutive week of losses—a record streak that underscores just how tough things have gotten for the company.
While some analysts are still optimistic about Tesla’s long-term prospects, the current state of the stock and the mounting challenges in key markets have investors on edge. With increasing competition from companies like BYD, and concerns over its self-driving technology, Tesla will need to act fast if it hopes to regain investor confidence and turn things around.
