Tesla Inc. (NASDAQ: TSLA) shares fell by 4% on Tuesday morning after RBC Capital Markets slashed its price target for the EV giant, citing escalating competition in key markets and lowering growth expectations for Full Self-Driving (FSD) and robotaxi initiatives.
RBC Lowers Tesla’s Price Target to $320
RBC revised its price target on Tesla from $440 to $320, reflecting a more cautious outlook on the company’s potential in the autonomous driving and robotaxi sectors. While RBC acknowledged minimal demand risks, the firm expressed concerns over reduced market share growth as European and Chinese EV makers intensify competition.
Rising Competition from Europe and China
Tesla is facing mounting pressure from European automakers and Chinese EV giants. The European Commission’s extension of EU CO₂ regulations for another three years will likely increase the regulatory burden on Tesla, affecting its credit forecast and profitability.
Meanwhile, Chinese EV manufacturers like BYD and Nio are rapidly expanding their global presence, offering cheaper yet advanced models, putting pressure on Tesla’s market share and pricing power.
Analysts Maintain a Cautious “Buy” Rating
Despite RBC’s price target cut, research analysts continue to back Tesla, maintaining an average “buy” rating. According to data from LSEG, the median stock price estimate for Tesla stands at $357.88, indicating a potential upside from current levels.
However, with market conditions tightening, analysts are closely watching Tesla’s expansion plans and how the company navigates the growing competition and regulatory challenges.
Tesla’s Expansion vs. Market Challenges
As Tesla faces increased competition, its expansion strategy will be under scrutiny. The company is banking on Full Self-Driving technology, robotaxis, and the Cybertruck launch to drive future growth.
However, with autonomous vehicle adoption and regulatory hurdles still uncertain, Tesla’s stock performance may remain volatile in the face of intensifying global EV competition.
