Tesla stock slapped with Wall Street downgrade ahead of Robotaxi launch

Core Viewpoint - Tesla's stock has been downgraded from 'Outperform' to 'Neutral' by Baird analyst Ben Kallo, with a price target of $320, reflecting concerns over the company's aggressive timeline for its robotaxi service launch [1][3][4] Group 1: Stock Performance and Analyst Ratings - Following the downgrade, Tesla's shares fell nearly 3% in pre-market trading, dropping to $286 [1] - The price target set by Baird represents an 8% upside from the closing price of $295 [1] Group 2: Robotaxi Service Concerns - Baird's skepticism is focused on the rollout of Tesla's robotaxi service, which will initially launch with only ten driverless Model Ys, a modest start compared to competitors like Waymo [3] - CEO Elon Musk has described the robotaxi service as a potential trillion-dollar disruptor, but Kallo believes the excitement surrounding it has already been priced into the shares [4] Group 3: Regulatory and Political Uncertainty - Tensions between Musk and former President Donald Trump over a GOP tax bill that removes EV tax credits have contributed to a significant 14% drop in Tesla's stock, equating to a loss of $150 billion in market value in a single day [4] - Trump's threats to cut government contracts, particularly those involving SpaceX, have raised concerns about a more challenging regulatory environment for Tesla's autonomous ambitions [5] Group 4: Long-term Potential and Market Outlook - Despite the downgrade, other analysts, such as Morgan Stanley's Adam Jonas, remain optimistic about Tesla's long-term potential, highlighting its advancements in autonomous driving, AI, and robotics [7] - Jonas projects that the urban air mobility market could grow from $1 trillion in 2040 to $9 trillion by 2050, estimating that Tesla's technological and manufacturing advantages could add between $100 to $1,000 per share in value [7] - Analysts believe that Tesla still possesses valuable assets that are largely apolitical, including leadership in AI, autonomy, manufacturing, and renewable power [8]