Wells Fargo Lead Bearish Charge On Tesla Target Prices Amid European Sales Meltdown
2min read Recently, several major banks have furthered their bearish stance on tesla, significantly lowering their price targets for the electric vehicle giant.
This pessimistic outlook is shared by other prominent financial institutions, all of which have recently revised their forecasts downward. The primary catalyst for this wave of downgrades appears to be Tesla's deepening sales struggles in Europe, compounded by broader challenges facing the company.
Banks' Revised Price Targets
Wells Fargo has doubled down on its bearish forecast, slashing its price target to $130, a stark warning of a more than 50% decline from Tesla's current valuation of $276. This move reflects growing skepticism about the automaker's near-term prospects.
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Wells Fargo analyst Colin Langan reiterated their Underweight rating on Tesla stock and included it in their tactical ideas list for the second quarter, indicating that they don't anticipate an imminent rebound. Langan explained that the expected sales slowdown will likely lead to a further decline in Tesla's earnings.
Moreover, Wells Fargo warned that the potential elimination of the $7,500 Federal tax credit by the Trump administration could exacerbate Tesla's sales challenges.
In addition, Langan expressed skepticism about a safe and successful launch of the Austin Cybercab. We remain skeptical of a safe & successful Austin Cybercab launch given limited unsupervised testing & their vision - only approach, he said. He further added that experts believe Tesla's autonomous driving tech has considerable safety concerns.
Similarly, Stifel, an investment bank, trimmed its price target to $455 from $474 on April 1st, signaling a more cautious stance despite remaining relatively optimistic compared to Wells Fargo. Deutsche Bank, based in Germany, also cut its target on the same day, reducing it to $345 from $420. Earlier, on March 27th, HSBC had already sounded the alarm, slashing its Tesla price target to $130, projecting a potential fall exceeding 50%.
These downward revisions from major banks highlight a growing consensus that Tesla faces significant headwinds, prompting analysts to reassess the stock's value.
International Sales Challenge
The bearish sentiment is largely driven by Tesla's faltering performance in key European markets, where sales have declined sharply. Official data from March paints a troubling picture:
France: Tesla registered 3,157 car sales, a 36.83% drop from last year, with quarterly sales down 41.1%.
Sweden: Sales fell to 911 units, plummeting 63.9% year-over-year, and quarterly figures dropped 55.3%.
Norway: A traditionally strong market for Tesla, saw registrations of 2,211, down 1% in March and 12.5% for the quarter.
Denmark: Sales totaled just 593, a staggering 65.6% decline, with a quarterly decrease of 55.3%.
Netherlands: Registrations dropped to 1,536, a 61% fall, and quarterly sales were down 49.7%.
These declines have eroded Tesla's market position in Europe. In France, for example, the company's market share shrank to 1.63% in the quarter ending March, down from 2.55% a year earlier, according to the national car body PFA. Meanwhile, Chinese EV makers like BYD and others have gained traction, boosting their collective market share to 3.19% in the same period.
Beyond the numbers, anti-Musk protests in Europe may also be contributing to Tesla's woes. These demonstrations, reflecting discontent with Musk, could be denting brand perception and consumer demand in the region, further fueling the bearish outlook.
Tesla's challenges extend beyond Europe. The company faces intensifying competition from both established automakers and emerging players, especially in China, in the electric vehicle space, putting pressure on its once-dominant market position. While Tesla remains a leader in the EV industry, these headwinds—combined with the European sales slump—have rattled investor confidence and prompted banks to adopt a more cautious stance.
