Li Auto (ADR)

Major electric vehicle (EV) companies in China just took a huge financial risk. The largest EV maker in the world’s largest EV market cut prices on its new models by as much as 34%. The price of its least expensive vehicle, the Seagull, will fall to $7,770. BYD’s major competitors—Geely, Li Auto, and Xpeng–matched the cuts. The Financial Times calls it an all-out price war. 24/7 Wall St. Key Points: Major Chinese electric vehicle (EV) makers have cut prices on new models by as much as 34%. Tesla Inc. (NASDAQ: TSLA) may have to match these cuts to keep market share. Take this quiz to see if you’re on track to retire. (sponsored) Tesla Inc. (NASDAQ: TSLA) may have to match these cuts to keep its market share in place, which threatens its profit margins. China is Tesla’s second-largest market. The company’s margins are already under pressure. Operating income dropped 66% in the most recently reported quarter, and carbon credits also hit it. Tesla is in a race, and a drop in auto sales makes winning that race more critical. According to the European Automobile Manufacturers’ Association, Tesla’s unit sales dropped 49% to 7,261 in Europe during April. Overall, EV sales in that market rose 34.1% during the same month. Investors believe that Tesla’s valuation is based more on self-driving success than unit sales. They reason that if it is the first to market with a truly autonomous vehicle, a sharp increase in car sales will follow. The company already has a service called Tesla’s Full Self-Driving (Supervised) mode. It is autonomous in many situations but warns drivers to keep their eyes on the road. Tesla’s first true self-driving vehicle, a robotaxi, will launch in Austin in late June. According to CEO Elon Musk, it will be a breakthrough. These cars will essentially drive themselves. Last year, Nvidia CEO Jensen Huang said Tesla had a lead in the auto AI sector. The Austin test may prove if he is right. But it already has challengers. The most visible is Google’s Waymo. Tesla may grab the lead in AI-controlled cars. In the meantime, Chinese EV companies sell cars outside China, which means they compete with Tesla in some countries. For the time being, that does not include the United States because of 100% tariffs on Chinese EVs. BYD has started to expand into several nations in Asia, as well as Brazil and parts of Europe. It also plans to build a plant in Hungary. BYD and some other Chinese companies claim to have self-driving features and can match Tesla’s service. If so, Tesla faces competitors who are willing to cut prices to gain market share and who have also moved into self-driving. Prediction: 1 Electric Vehicle Stock Poised to Overtake Tesla by 2030 The post Chinese EV Price Cuts Aim to Cripple Tesla appeared first on 24/7 Wall St..» Mehr auf 247wallst.com

Shares of Tesla Inc. (NASDAQ:TSLA) gained 1.38% over the past five trading sessions, brining its one-month gain to an eye-catching 36.04% as the stock continues to rally back from disastrous losses in Q1. The recent gains have been welcomed by investors who have endured a year-do-date loss of 9.97% and seen the stock slip 28.82% since hitting its all-time high of $479.86 on Dec. 17, 2024. Buy-and-hold investors are hopeful the EV maker has found its bottom amid a highly volatile six-month stretch. But the recent rally in TSLA comes despite a poor earnings report in Q1 followed by collapsing sales figures in the U.S. and abroad. In early May, it was reported that Tesla has around $800 million worth of Cybertrucks stuck on lots. It was also reported this month that, in addition to collapsing sales in Europe broadly, Tesla has seen sales in Sweden plunges 80.7%. In April, it was reported that Tesla now accounts for fewer than 50% of EV sales in California. After absorbing enormous losses, Elon Musk’s EV empire fell outside of the $1 trillion club, but as of May 19, the company’s market cap stands at $1.09 trillion. Nonetheless, questions linger as to whether the company’s most ambitious of growth drivers (think Cybercab and Optimus humanoid robot, both of which were featured at the company’s robotaxi event last year) will bear fruit sooner rather than later. Indeed, Tesla’s stock has gone through vicious crashes before. And while the stock may not be ready to shift gears from reverse to forward, I do think that a worsening of its latest drawdown could prove a significant buying opportunity, given the chance its drivers could pay off at some point over the medium term. Undoubtedly, the bears may be winning the tug-of-war on the stock now, as Elon Musk’s role at DOGE (Department of Government Efficiency) becomes old news as hype surrounding Musk’s friendship with Trump begins to fade. However, with EV competition mounting and a Jeff Bezos-backed startup entering the scene, Tesla’s outlook remains clouded. In any case, 24/7 Wall St. dove into the lengthy list of drivers and potholes that investors should look forward to (or fasten their seatbelts for) in the coming year and beyond. Let’s check out a bull, bear, and base case for the EV titan and have a glimpse at the varied viewpoints of multiple Wall Street pros. In fact, Tesla stock has a ton of table-pounding bulls in addition to massive bears. While not everyone is the biggest fan of Elon Musk, I do think it’s a mistake to discount his ability to keep running with the ball into the endzone with disruptive innovations that, while costly in the near term, could prove revolutionary over the longer term. Key Points in This Article: Tesla remains the leader of the EV revolution, dominating global market share despite the stock’s recent struggles. The company faces numerous headwinds, which could ultimately impact its long-term performance. If you’re looking for a megatrend with massive potential, make sure to grab a complimentary copy of our “The Next NVIDIA” report. The report includes a complete industry map of AI investments that includes many small caps. Tesla’s Top Two Growth Drivers Are Still Humming Along For a stock that’s fallen significantly, I’d expect the growth narrative to have been severely impacted. Tesla’s latest quarterly earnings results were not incredible. Yet, I do think that the sell-off is mostly a mere correction to make up for the euphoric melt-up experienced in the back half of last year. Indeed, investors got too far ahead of themselves when it came to Tesla’s most ambitious growth drivers. Now that investors are taking a step back, we’ll have to wait and see if Tesla can advance such drivers meaningfully. Undoubtedly, Tesla has a front-row seat to the AI revolution. More specifically, it’s one of the frontrunners in physical AI (or robotics, if you prefer). In a prior piece, I highlighted Wall Street analyst Adam Jonas’ view that TSLA stock was akin to an embodied “AI ETF” given the numerous AI projects going on behind the scenes. Though Tesla’s AI efforts are exciting, it’s important to note that being too soon to a trend could have a drastic negative impact on the stock. As investors reset expectations and become more critical of how firms spend money on AI, Tesla will need to deliver more substance if it’s to convince investors to punch their ticket to the stock well ahead of time. Personally, I think Tesla’s been investing in the right areas, but will competitors beat Tesla to market in certain categories? The most notable drivers, I believe, that will drive Tesla stock in the coming years are the Cybertruck (as well as self-driving capabilities and the impact on the robotaxi market) and its Optimus robot. Of course, there’s also the rumored “Model Q” entry-level offering. But until we get more clarity on that driver, I consider it to be more of a “wild card.” Bull Case for Tesla’s Share Price Cybertruck: The Cybertruck stole the show during Tesla’s robotaxi event. While it would be a sci-fi dream for many to have a fairly reasonably priced robotaxi producing passive income for its owners, I do think Musk’s vision of the robotaxi future could be a reality within Trump’s term. Of course, a more realistic timeframe would put such a future more than 10 years out. However, if Tesla can floor it on full self-driving (FSD) efforts, perhaps such a future could be closer to the present. There’s a great deal of uncertainty with FSD, given the technical and regulatory unknowns. Either way, I view Musk’s friendship with Trump as a boon for a Cybertruck rollout under his administration. If Cybertruck expands its presence and becomes a hit within years rather than decades, TSLA stock could prove a bargain, given all that there is to gain. The big question, though, is how Cybercab will hold its own as Waymo pushes ahead with its impressive offering. Given robotaxis, like generative AI, are unlikely to be a “winner takes all” market, I think there’s no reason why both robotaxi offerings can’t win big from prime-time adoption of self-driving. Another big question to consider is whether consumers will be interested in buying up Cybercabs to have them rolling around on the streets as ride-hailers. I think the business could prove quite lucrative for buyers and Tesla’s margins over the long haul. After all, it can sell the car and continue to build a ride-hailing network while profiting from use of a ride-hailing app of sorts. Cathie Wood thinks autonomous ride-hailing could represent a multi-trillion-dollar opportunity. If Tesla can get a nice slice, Wood sees TSLA stock at $2,600 per share by 2029. Personally, I think the bull case (for the year ahead) could see TSLA at around $550 per share — or 100.19% higher than where the stock is trading today. That target is shared by Wedbush Securities’ Dan Ives, one of my favorite analysts in tech. Optimus: Optimus was a nice addition to the robotaxis event as it amused attendees. But the big question is how much potential the robot has once it’s ready to go on sale to the general public. Undoubtedly, Tesla isn’t the only one getting into the robotics game. Many Mag Seven members also investing heavily in home robots. While more rivals in home robots could be a threat to Optimus, I view it as more of a confirmation that there is a place in the home for such profound innovations. As for the home robotics market, I do see 2026 as a tad overly optimistic for a launch. However, if robot “friends” do arrive by 2030, I think Tesla’s growth rate could reaccelerate back to or even above 25% to 30% for some amount of time. Bear Case for Tesla’s Share Price Cybertruck: Undoubtedly, there’s still a lot of work to do before Cybertruck makes an impact on the car market. FSD capabilities need to step things up and the vehicle needs to be made in a way that won’t break the bank. These are big asks. Some bears have doubts about whether the firm can execute the opportunity. In late March, the company announced that it was recalling nearly every Cybertruck due to a potential crash risk. This was an enormous blow to Musk’s ambitions for the EV, which has already been subjected to harsh criticism about its perceived shortcomings among owners. Ross Gerber, who previously owned shares, has sold out with the view a 50% crash would be in store for 2025. He also thinks FSD “doesn’t work.” If true, that’s a gut punch to Tesla’s biggest growth driver. Either way, there’s not too much room lower with TSLA now off 40%. With Guggenheim labeling TSLA stock as a Sell with a $175 target, I’d brace for even more pain if the market sell-off intensifies. That price target represents additional downside potential of 36.30% from today’s share price. Bad Press: Musk’s deteriorated image at the hands of his federal government involvement with DOGE aside, Tesla has continued to bear the brunt of bad news. In late 2024, it was widely reported that the EV maker was the most dangerous vehicle brand, with the number of deaths among all automakers, according to the Insurance Institute of Highway Safety. According to the study, Tesla has a fatal accident rate of 5.6 per billion vehicle miles, compared to the overall average of just 2.8. Additionally, ongoing protests against the brand — including vandalism and arson — have occurred around the globe, from Italy and France to numerous states in the U.S. Optimus: Even if home robots are on the horizon, good luck asking consumers to spend thousands on a proven technology. Indeed, if Vision Pro taught us anything, it’s that being an early adopter is expensive and probably not the best use of funds. Either way, I’d much rather wait and see how the robot ambitions pan out before getting too excited at this stage. Insider & Institutional Activity: There’s an old adage on Wall Street that suggests investors should “follow the money.” If that’s the current case for Tesla, money is flowing out. In fact, over the past 12 years, no one single share of TSLA has been purchased by insiders (e.g., the company’s executives, directors or anyone who owns 10% or more of the company), according to Nasdaq.com. Data from Finviz supports this, even showing that Musk himself, as well as his brother, have been offloading shares since late 2024. Additionally, institutional ownership has now decreased to just 48.76%. In total, 479 institutional investors have entirely liquidated their Tesla positions, with 1,892 institutional holders having decreased their positions versus 2,015 who have increased them. Price Targets: In April, Goldman Sachs lowered its price target on Tesla to $260 from $275 while maintaining a neutral rating. The firm reduced its auto industry outlook and estimates, saying it will be difficult for the auto industry to fully pass on tariff costs, especially given softening consumer demand. Nonetheless, Goldman Sachs’ one-year price target represents downside potential of 23.73% from today’s price. Increased competition: Also in April, a Jeff Bezos-backed EV company called Slate unveiled affordable EV truck and SUV models that cost $20,000 after federal incentives. The company has billed itself as the “anti-Tesla,” and is made in the U.S. As Tesla’s market share has fallen under 50% in EV-friendly California, the arrival of Slate could continue to erode sales. Base Case for Tesla’s Share Price The base case for Tesla lies somewhere in between the two extremes. Wall Street analysts have assigned TSLA a median one-year price target of $260 share, or 23.73% potential downside from today’s price. Meanwhile, the high-end target is $500 and the low-end target is $19.05. I’m inclined to view the $300 level as a fair-value level for the stock. Much of Tesla’s story depends on its big growth drivers. In the meantime, EV sales and the rise of more affordable models (Model Q) could be nearer-term stories to look forward to as one waits for the biggest of drivers to pay off. At the time of writing, TSLA stock goes for 176.56 times forward price-to-earnings (P/E) and 9.58 times froward price-to-sales (P/S). That makes the name slightly undervalued, at least in my view. The post Tesla (NASDAQ: TSLA) Bull, Base, & Bear Price Prediction and Forecast appeared first on 24/7 Wall St..» Mehr auf 247wallst.com

China's leading EV maker BYD announced price cuts to many of its models over the weekend, triggering fears of an intensifying price war.» Mehr auf barrons.com