Tesla Stock Rebounds, But Challenges Remain
Tesla's (TSLA) battered stock has gained support technically, bouncing above its 100-day moving average. However, it remains down 12% year-to-date and faces fundamental headwinds.
China Sales Slump and Competition
Sales in China, a key market for Tesla, dropped 33% year-over-year in January. Meanwhile, EV competition is increasing, with rivals such as Ford, Volkswagen, and Hyundai gaining ground.
Used Tesla Price Declines
Prices of used Teslas have been falling in the US, with a 1% drop in the past 30 days and a 5.49% decline in the last 90 days. This suggests waning demand and increased competition.
Trump Tariffs and Supply Chain
Trump administration tariffs on steel and aluminum are expected to raise costs for Tesla and other automakers. Additionally, 40% of suppliers for materials used in Tesla's batteries are Chinese companies, potentially impacted by trade tensions.
Mixed Analyst Sentiment
Despite the challenges, some analysts remain bullish on Tesla. Benchmark initiated coverage with a Buy rating and $475 price target, citing growth opportunities in robotaxis and Optimus robotics.
Fourth Quarter Disappointment
Tesla's fourth-quarter earnings fell short of analyst estimates, with automotive sales declining 8% year-over-year. Price cuts across the lineup may have further pressured margins.
Overall, while the stock's technical recovery provides some relief, Tesla faces ongoing challenges from competition, slowing demand, and potential cost increases.