Tesla’s autonomous taxis are not going to save the company’s stock from weak fundamentals this year, according to Wells Fargo analysts. Wells is sticking by its underweight rating on Tesla , a minority view among Wall Street analysts after the stock has soared in the wake of President-elect Donald Trump’s promises to deregulate industry and his close ties to Tesla CEO Elon Musk. The bank sees Tesla shares plunging nearly 70% to $125 over the next year, challenged by persistently weak business fundamentals. Tesla has struggled to boost deliveries despite price cuts and faces intense competition from Chinese electric vehicle manufacturers. Moreover, the likely repeal of Inflation Reduction Act tax credits will raise Tesla prices by 12%, according to Wells. “Despite a lot of ‘razzle-dazzle’ in 2024, these concerns remain,” Wells analysts led by Colin Langan told clients in a Wednesday note. Tesla would be hurt the most by the repeal of electric vehicle tax credits, the analysts said. For example, Tesla sales collapsed 41% year over year in Germany after incentives were cut, they said. The Wells analysts also cautioned investors against overhyping Tesla’s autonomous Cybercab and humanoid robot Optimus, both of which are still under development. The market value of these projects soared by $700 billion in 2024, but Wells sees “material downside risk” to that valuation. “We believe CyberCab risk outweighs the reward given the potential for setbacks on regulation or safety that would damage credibility,” the analysts said.
