Tesla stock to crash 45% after Robotaxi launch, according to Wall Street analyst

Despite initial excitement surrounding Tesla's robotaxi launch, Guggenheim and UBS analysts maintain bearish outlooks on TSLA, citing fundamental concerns and weak delivery expectations. Guggenheim analyst Ronald Jewsikow reiterated a 'Sell' rating and $175 price target, emphasizing deteriorating business fundamentals and stock gains driven by hype. UBS analyst Joseph Spak similarly issued a 'Sell' rating, forecasting Q2 deliveries 10% below consensus and highlighting a 27.9% year-over-year drop in Tesla's European sales in May, contrasting with a surging regional EV market, underscoring increasing competition and market share erosion.

Analysis

Despite recent stock price resilience above $300 following the launch of Tesla's robotaxi service, a consensus of bearish analyst sentiment highlights significant underlying risks. Guggenheim analyst Ronald Jewsikow maintains a 'Sell' rating with a $175 price target, suggesting a 46% potential downside, and characterizes the robotaxi launch as an "uneventful" event that fails to mask the core business's fundamentals, which he describes as "deteriorating at an alarming rate." This view is reinforced by UBS, which also holds a 'Sell' rating, forecasting Q2 deliveries of 366,000 units—10% below consensus estimates. The fundamental weakness is substantiated by hard data from Europe, where Tesla's new vehicle sales plummeted 27.9% year-over-year in May, directly contrasting with a 27.2% surge in the overall regional EV market. This has resulted in Tesla's European market share contracting from 1.8% to 1.2%, signaling intensifying pressure from more affordable Chinese EVs and potential consumer pushback.

Key Decisions for Investors

• Investors should weigh the current valuation, heavily influenced by long-term robotaxi optimism, against concrete evidence of weakening core automotive fundamentals, including a predicted 10% miss on Q2 delivery consensus.
• Monitor the upcoming Q2 earnings call closely, as it will be a pivotal moment for management to address deteriorating sales trends and for investors to gauge whether the long-term narrative can continue to overshadow near-term performance issues.
• The significant 27.9% year-over-year sales drop in Europe amidst a growing market signals a critical loss of market share and intensifying competition, warranting a reassessment of Tesla's competitive moat and future growth trajectory in key international markets.