Why Tesla Stock Struggle, What UBS New Survey Reveals?

Why Tesla Stock Struggle, What UBS New Survey Reveals?
Why Tesla Stock Struggle, What UBS New Survey Reveals?
Why Tesla Stock Struggle, What UBS New Survey Reveals?

Why Tesla Stock Struggle, What UBS New Survey Reveals?

The trajectory of Tesla’s stock has hit a rough patch, as lackluster delivery figures have triggered a downturn in its share price. The latest findings from a UBS survey have illuminated the hurdles looming on the horizon for the company, pointing towards a more challenging path ahead.

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Tesla’s delivery performance has fallen short of projections, sparking concerns among investors and industry experts. The renowned electric vehicle giant unveiled a disappointing first-quarter report on vehicle production and deliveries.

The delivery figures witnessed an 8.5% drop from the same period last year and a substantial 20% decline from the previous quarter, marking the first year-over-year decrease since Q2 of 2020. This slump in deliveries has significantly impacted investor confidence.

The decline in deliveries has been mirrored by a slide in Tesla’s stock price, reflecting apprehensions surrounding the company’s performance and the broader electric vehicle market. Despite a modest uptick of over 4% on Monday, the stock has witnessed a notable plunge of 30.83% in 2024, underscoring the market’s response to Tesla’s recent performance.

Robotaxi/Model 2 Developments Tesla’s stock price experienced a dip during Friday’s trading session following a Reuters report suggesting that Tesla would abandon its upcoming Model 2 project, halting efforts to introduce a $25k consumer electric vehicle.

However, Tesla’s CEO Elon Musk swiftly refuted the report on X shortly after its publication, dismissing it as misinformation. Tesla’s stock rebounded on Monday after Musk took to Twitter on Friday, post-market close, hinting at an upcoming “Tesla Robotaxi unveil on 8/8.”

In response to Friday’s developments, analysts at Deutsche Bank noted in a report that the recent Tesla-related news could be “thesis-changing” for investors. However, they emphasized that numerous questions remain unanswered, and it is premature to determine whether the news is bearish or potentially positive.

Why Tesla Stock Struggle, What UBS New Survey Reveals? UBS Foresees Challenges Ahead for Tesla
In a client note on Tuesday, UBS analysts disclosed that their survey results indicate a challenging road ahead for the electric vehicle manufacturer.

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The investment bank highlighted that stagnant EV demand and heightened competition from China could impede Tesla’s growth in the near-to-mid-term.

According to the UBS survey, Tesla maintained its position as the top consideration for battery electric vehicle brands globally, with a 39% share, albeit showing a slight decline, with BYD emerging as the largest gainer. “Given the survey results indicating a sustained plateau in EV demand outside of China and increased competition within China, we perceive these findings as obstacles to Tesla’s unit growth in the upcoming years,” UBS stated. With a Neutral rating and a $160 price target on Tesla shares, the bank underscored that the survey outcomes reinforce their delivery forecasts for 2024 and 2025, which stand below the consensus estimates.