Tesla Analyst Says Demand Fears 'Overblown,' But Has Some Concerns As Used Car Prices Plummet

Group 1: Analyst Insights - RBC Capital analyst Tom Narayan has lowered Tesla's price target from $440 to$320 while maintaining an Outperform rating, citing concerns over full self-driving (FSD) pricing and vehicle demand [1] - Narayan believes that fears regarding demand are exaggerated, as Europe and China, where Tesla is losing market share, represent a small portion of overall vehicle sales [2] - The analyst has revised FSD pricing assumptions, predicting a drop from $100/month today to$50/month by 2026 [2] Group 2: Market Share and Valuation - Tesla's market share for robotaxis in Europe and China is expected to be lower than previously anticipated, with domestic OEMs likely to dominate the market [3] - The sum-of-the-parts valuation has decreased significantly, with FSD valuation dropping from $383 billion to$211 billion and robotaxi valuation falling from $879 billion to$641 billion [4] - Narayan has also revised delivery growth estimates for fiscal 2025 from 14% to 11% [4] Group 3: Used Vehicle Market Trends - Tesla used vehicle prices have declined sharply, falling 3.7% over the last three months and 7.3% over the last year, compared to overall used car market declines of 1.1% and 2.7% respectively [6] - Among Tesla models, the Cybertruck and Model S have experienced the most significant price drops, with declines of 11.5% and 8.3% over the last three months [6] Group 4: Consumer Sentiment - A recent poll indicated that 53% of respondents stated they would never own a Tesla, while only 23% said they were more likely to buy one following Donald Trump's purchase and endorsement [7][8] - Despite Trump's purchase, the impact on Tesla's sales and demand appears minimal, with recent sales figures expected to be closely monitored due to ongoing boycotts and sales declines [10] Group 5: Stock Performance - Tesla's stock has decreased by 6% to $223.76, down 41.0% year-to-date in 2025 and over 50% from all-time highs set in December [11] - The stock is currently trading below levels seen when Trump won the 2024 election, indicating a significant decline in market confidence [11]