Tesla (NASDAQ:TSLA) stock has been facing a challenging period with weak deliveries resulting in a decline in its share price. The recent UBS survey results have shed light on the obstacles that lie ahead for the company, indicating a tougher road to navigate in the near future.
Tesla's delivery numbers have fallen short of expectations, triggering alarm bells among investors and industry observers. The electric vehicle behemoth unveiled a lackluster first-quarter vehicle production and deliveries report.
Deliveries saw a decline of 8.5% from the year-ago quarter and approximately 20% from the fourth quarter, marking the first year-over-year decline since the second quarter of 2020. This downturn in deliveries has significantly impacted investor sentiment.
This dip in deliveries has been accompanied by a drop in Tesla's share price, mirroring the concerns surrounding the company's performance and the EV market at large. Despite a rise of over 4% on Monday, the stock has seen a significant decline of 30.83% in 2024, a clear reflection of the market's response to Tesla's performance.
Robotaxi/Model 2 updates
Tesla’s stock price declined during the session on Friday after a Reuters report claimed Tesla is scrapping its upcoming Model 2, stopping its efforts to produce a $25k consumer electric vehicle.
However, Musk quickly dismissed the article on X shortly after its release, describing it as a lie.
Tesla’s stock then rose on Monday after Musk tweeted again on Friday, this time after the close, saying, “Tesla Robotaxi unveil on 8/8."
Reacting to Friday’s news, analysts at Deutsche Bank said in a note that they view the sequence of Tesla news as potentially “thesis-changing” for investors. However, they believe many questions are still unanswered, and it "may be too early to tell if it is particularly bearish, or potentially positive."
UBS sees ‘tougher today ahead’ for Tesla
Meanwhile, in a note to clients Tuesday, analysts at UBS revealed that its survey results point to a tougher road ahead for the electric vehicle maker.
The investment bank said that plateauing EV demand and more China competition could impact TSLA's near-to-mid-term growth.
According to the UBS survey, TSLA kept their leading battery electric vehicle brand consideration with 39% globally, but it ticked down with BYD (SZ:002594) the largest share gainer.
“Given the survey results show outside of China, a continued plateau in EV demand and inside of China, more competition, we view the results as headwinds to TSLA unit growth over the coming years,” stated UBS.
The bank, which has a Neutral rating and a $160 price target on Tesla shares, added that the results give them comfort in their 2024/25 delivery forecast of 1.88 million and 2.07 million, respectively, being below the consensus of 1.99 million and 2.35 million.