24/7 Insights

• Wall Street expectations for where Tesla Inc. (NASDAQ: TSLA) stock is headed vary considerably.
• The electric vehicle (EV) maker faces plenty of headwinds and risks, but some analysts still have faith.

Tesla Inc. (NASDAQ: TSLA) was for years a car lover’s dream and a stock market darling. However, things have changed in the past year or so, with autonomous driving technology and a recent product launch that have failed to impress. Its dominant market position has come under increasing pressure as competition grows. And some of the antics of its visionary leader have not helped its case. Shareholders and would-be investors must be wondering where the stock could be headed.

Why Invest in Tesla?

Since going public in 2010, Tesla stock is up more than 11,300%. The company is known for its innovations and quality products, which means it is often valued more as a technology company than an automaker. The brand had one of the best reputations in the world a few years ago. However, both the brand and the stock have taken a few hits since then, leaving investors to decide if the best days are in the rear-view mirror or whether the pullback is a great opportunity to get a stellar stock at a bargain.

Tesla, the Company

The company’s name is a tribute to renowned inventor and electrical engineer Nikola Tesla. It designs, develops, manufactures, sells, and leases electric vehicles, as well as energy generation and storage systems, in the United States, China, and elsewhere. The company also is developing artificial intelligence and robotics products. In 2023, its Model Y midsize SUV was the bestselling car in the world.

Tesla is based in Austin, Texas. It was founded in summer of 2003 by Martin Eberhard and Marc Tarpenning, and it went public in summer of 2010. Its biggest competitor is Chinese EV maker BYD. Others include Rivian Automotive Inc. (NASDAQ: RIVN) and Nio Inc. (NYSE: NIO). Major manufacturers such as Ford Motor Co. (NYSE: F) and Hyundai also make and sell EVs. Enphase Energy Inc. (NASDAQ: ENPH) is a rival in the energy storage space.

Tesla shareholders recently approved a $56 billion pay package for CEO Elon Musk. The company has been cutting prices this year to help it maintain its market share dominance. And the highly anticipated next big thing in the works is a robotaxi, an autonomous EV. Producing full self-driving vehicles has been something of a sore spot for Tesla, after several high-profile crashes. Plus, some investors worry that Musk’s involvement in X (formerly Twitter), aerospace company SpaceX, and other endeavors have him spread too thin.

Here Is How Much Money Tesla Makes Every Minute

Tesla, the Stock

The share price is over 28% lower than a year ago, most of that retreat coming since the beginning of this year. The Nasdaq is up about 31% year over year. Note that the $179.61 consensus price target is less than the current share price.

Out of 23 analysts who cover the stock, just eight recommend buying shares. Morgan Stanley and RBC Capital recently reiterated Buy-equivalent ratings. About 45% of shares are held by institutional investors, including at Vanguard, BlackRock, and State Street. Note that an executive sold 650 shares earlier this month, and a director parted with 93,705 shares in May.

Wall Street expectations for where the stock goes in the next 52 weeks vary. While at least one analyst anticipates notable upside, the lowest price target indicates an even bigger drop in the share price. Moreover, the consensus projection is near the current share price.

Low target	$22.86	−87.5%
Mean target	$179.61	−1.9%
High target	$320.00	74.8%

As mentioned, Tesla does face significant headwinds and risks. Many people consider Tesla vehicles to be too expensive, and there are concerns about the safety and reliability of batteries and a scarcity of charging stations. Tesla also faces increasing competition from both major automakers and EV startups. If that wasn’t enough, there is Musk’s propensity for scandal.

While the outlook may not be as rosy as a year ago, clearly some analysts expect the stock to rally once more in the coming year. That may depend on Tesla holding on to its dominant position, which likely depends on it continuing to innovate, including robotaxis making a splash (more than the Cybertruck), and the introduction of more affordable EVs.

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