Key insights
- HSBC analyst Michael Tyndall reiterated a 'reduce' rating on Tesla with a $131 price target, implying a 65% downside. The analyst believes the EV market is becoming regionalized, with weakening international demand for Tesla in China and Europe. Declining vehicle deliveries and revenue could pressure the stock until other growth initiatives gain traction. This report presents a bearish outlook for Tesla, potentially impacting investor sentiment.
While Tesla (TSLA 2.76%) has seen some big share price swings over the last year, the stock has generally been on a hot streak. The company's share price has risen roughly 37% over the last 12 months. However, some skeptics are arguing that the electric vehicle (EV) leader's valuation is on pace for a dramatic pullback.
At the beginning of January, HSBC analyst Michael Tyndall published coverage on the stock that reiterated a reduce rating and a one-year price target of $131 per share. As of this writing, Tesla stock trades at roughly $373 per share. That means that the stock would fall roughly 65% if it were to hit HSBC's most recent pricing target. Here's why HSBC's lead analyst on the stock thinks that Tesla could be poised for a plunge.
While recent bullish catalysts for Tesla stock have centered around opportunities in the robotaxi and humanoid robotics markets, HSBC's Tyndall sees more powerful valuation pressures stemming from dynamics in the core EV market. Tyndall says that the EV market is becoming increasingly regionalized, with residents of markets including China and the European Union showing increased preference for domestically originated offerings. Recent sales trends for Tesla and other U.S.-based EV makers suggest that global growth opportunities may be significantly weaker than previously anticipated.
In conjunction with weaker international demand, Tesla saw its total vehicle deliveries fall 8.6% in 2025 and overall revenue decline roughly 3%. If the trend of weakening vehicle sales continues, Tesla stock could face pressure until progress on its other growth bets starts to become a safer bet.