RBC Capital Markets has adjusted its outlook on Tesla Inc., reducing the company’s stock price target to $320 from the previous $440. This adjustment reflects growing concerns over Tesla’s competitive position in key international markets and potential changes in its Full Self-Driving (FSD) service pricing. Despite the lowered target, RBC maintains that there remains a significant upside of 34% for Tesla’s shares. Investors are closely monitoring these developments as they assess the company’s future performance.
Analysts from other financial institutions have also revised their Tesla price targets downward. Goldman Sachs recently adjusted its target to $320 from $345, while Wells Fargo lowered its estimate to $130 from $135. These changes indicate a broader trend of skepticism among market experts regarding Tesla’s near-term stock performance.
What Factors Led to the Price Target Reduction?
The primary reason for RBC’s revision is the anticipated decrease in Tesla’s FSD subscription price.
“We now assume Tesla FSD pricing drops to $50/month in 2026 from $100/month today,”
RBC analyst Tom Narayan stated. This reduction in subscription fees is expected to impact Tesla’s revenue projections negatively.
How Is Tesla Faring Against Global Competitors?
Tesla is facing intensified competition, particularly in Europe and China, which has prompted RBC to lower its market share expectations in these regions.
“We now lower our market share assumption to 10% from 20% in both markets,”
Narayan explained. The rise of domestic OEMs in China, especially in the robotaxi segment, is a significant factor contributing to this shift.
What Is the Outlook for Tesla’s Sales?
Despite concerns in Europe and China, Tesla’s sales in the United States have shown modest growth. Narayan believes that the overall impact on Tesla’s annual sales remains limited, countering the pessimistic views held by some analysts regarding quarterly delivery numbers.
Contrary to RBC’s cautious stance, other analysts remain optimistic about Tesla’s prospects. Morgan Stanley’s Adam Jonas predicts a 90% rebound in Tesla’s stock within the next year, citing the potential for FSD’s unsupervised use in Texas-based paid rideshare services as a key growth driver. This divergence in analyst opinions highlights the complex dynamics influencing Tesla’s market performance.
Tesla’s ability to navigate increasing competition and adapt its service offerings will be crucial in determining its future stock trajectory. Investors would benefit from closely monitoring Tesla’s strategic responses in the face of these challenges, as well as any further adjustments to its pricing and market share assumptions. Understanding these factors will provide a clearer picture of Tesla’s potential for sustainable growth and profitability.
- RBC cuts Tesla price target to $320 from $440.
- Lowered expectations on FSD pricing and market share.
- Other analysts hold varied outlooks on Tesla’s future.
