According to the Financial Association on January 8 (edited by Huang Junzhi), Tuesday was a tough Trade day for Tesla. By the end of Tuesday's trading, the stock fell 4.06%, closing at $394.36.

Furthermore, Bank of America Analyst John Murphy released a new report downgrading Tesla's rating from "Buy" to "Neutral," while also issuing a few warnings. At the same time, he raised the Target Price for Tesla Stocks from $400 to $490.

Murphy pointed out that since the upgrade of Tesla's stock rating by the bank last April, most of the upside potential for the electric vehicle manufacturer has been "realized". Since then, Tesla's stock price has risen by more than 60%, although most of the increase occurred after President Trump won the election last November.

In discussing this adjustment, he wrote: "While this still means upside potential, the execution risks are high, and Tesla's current trading level fully reflects our fundamental (long-term) potential in core Autos, autonomous taxiing, Optimus (humanoid robot), and Energy generation and storage."

Tesla's Advantages

Specifically, from the perspective of core Autos, Murphy believes that in the long run, Tesla's market share in the Global automotive market will reach 5%, making it one of the top ten Global Auto Manufacturers. He mentioned Tesla's advantages: the ongoing trend of electrification, Tesla's cost structure being lower than that of other Auto Manufacturers, and technical advantages in Software functions such as fully autonomous driving.

He also pointed out that new cars will expand Tesla's total target market or maximum revenue opportunity, which is more impactful growth than product updates alone. Murphy anticipates that Tesla will introduce a low-cost car in the first half of 2025 and another new model later this year.

On the other hand, Tesla Energy deployed a record 11 GWh of energy storage in the fourth quarter and 31.4 GWh of energy storage in the 2024 fiscal year, showing outstanding performance that year.

Finally, Murphy is most optimistic about the launch of robot taxis, believing they are worth $420 billion just in the USA. He wrote: "This reflects our assumption that Tesla can achieve a lower per-mile cost than Uber Technologies, Lyft, and taxis, allowing it to price aggressively, expand the entire potential market, and achieve higher per-mile profits."

Headwinds.

Tesla's vehicle delivery performance in the fourth quarter of 2024 and for the 2024 fiscal year was weaker than expected, and the company's announced annual overall sales also showed a decline. Murphy pointed out that despite improved investor sentiment due to Trump's election victory, he emphasized that the company faces some execution risks this year.

He explained that in addition to expanding the testing of autonomous taxis and launching services on time without major issues, Tesla must also launch new products on schedule by 2025, scale up the autonomous taxi department without impacting its full self-driving software business, respond to competition from other electric vehicles, and negotiate uncertain regulatory frameworks in the USA and abroad.

"And all of this is happening during a time of weak demand for electric vehicles," he wrote.

Finally, in the above report, Murphy listed a specific "execution timeline" and risks:

Launch a low-cost model in the first half of 2025, and another new model in the second half of the year (a key driver of sales growth);

The robotaxi is scheduled for launch in mid-2025;

The production of Megapack at the Shanghai assembly plant should begin to increase in the first quarter of 2025;

Updates for FSD subscribers;

Production of Optimus will begin to expand, aiming to reach 1,000 units by the end of 2025;

The new policy's bullish prospects for Tesla are less than expected risk;

Positive financing will help accelerate growth.

However, Murphy did not mention the potential impact of Tesla CEO Musk's close relationship with Trump, which may help this auto manufacturer obtain a favorable regulatory environment.

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Editor/ping