Tesla, the electric vehicle powerhouse, recently faced a dip in its share price following a bearish call from HSBC, which initiated coverage with a reduced rating and a price target suggesting a 30% drop. HSBC analyst Michael Tyndall cited high costs in Tesla’s non-car ventures and concerns over Elon Musk’s central role in the company as key factors.
Despite this, Tesla’s stock bounced back modestly the following day, reflecting unwavering confidence from Tesla bulls, unfazed by HSBC’s extensive 108-page analysis.
The stock had experienced a 32% decline from its July high to its October close but showed signs of resilience with a subsequent 8.8% rise. This optimism stems from the belief that Tesla is more than an auto manufacturer—it’s seen as a trailblazing tech company.
Gary Black, managing partner of Future Fund and a staunch Tesla supporter critiqued HSBC’s approach, arguing that it treated Tesla like a traditional auto company rather than the high-growth tech player it is. Black disputes HSBC’s projection of Tesla’s growth, foreseeing a much higher output of 10 million vehicles by 2030, driven by global EV adoption and Tesla’s market share.
Wedbush Securities analyst Dan Ives, another Tesla proponent with a $310 price target, views the recent selloff as a golden opportunity to invest more in the company. Ives sees Tesla as a disruptive tech entity, and is bullish on its prospects, predicting a significant rise in stock value over the next six to nine months.
Ives believes that Tesla’s recent price cuts and cost-saving measures, particularly in China, are strategic moves to reclaim market share and address softening demand. He maintains that Tesla’s competitors in the EV sector still lag in terms of scale, keeping Tesla in a dominant position.
His optimistic stance is backed by the expectation that most of Tesla’s price cuts are behind them, paving the way for improved gross margins akin to those of Big Tech firms. Ives asserts that until competitors catch up in scale, they pose little threat to Tesla’s market leadership.
In summary, while HSBC’s bearish analysis casts doubt on Tesla’s future, the company’s staunch supporters see it as a temporary setback, an “air pocket” in Tesla’s otherwise upward trajectory. They remain confident in Tesla’s innovative edge in the EV market, reinforcing the sentiment that in the world of electric vehicles, it’s still very much Tesla’s game.