🚨 PIPER SANDLER: Fears over Tesla's regulatory credit decline are overblown.They still expect $3B in 2025 and $2.3B in 2026—no major hit.Reiterates Overweight & $400 PT on $TSLA*Walter Bloomberg (@DeItaone):$TSLA - PIPER SANDLER: TESLA REGULATORY CREDIT RISKS OVERSTATEDPiper Sandler reiterated its Overweight rating and $400 price target on Tesla, saying regulatory credit concerns are overblown. While Tesla received ~$3.5B in credits last year (equal to its free cash flow), the ...

Core Viewpoint - Lucid Group is projected to experience significant sales growth in the coming years, but faces a hidden challenge related to the potential loss of a crucial profit source from regulatory credits [1][5][8]. Group 1: Sales Growth Projections - Analysts forecast Lucid Group's sales to surge by over 70% this year and by 97% next year [1]. - The company began production of its Gravity SUV earlier this year, which is expected to drive substantial sales increases in 2025 and 2026 [3]. - Lucid is expected to start production of several new models priced under $50,000 by late 2026 or early 2027, potentially tapping into tens of millions of new buyers [4]. Group 2: Profitability Challenges - Despite the optimistic sales outlook, Lucid has remained unprofitable after nearly 20 years of operation, necessitating continuous capital raises [3]. - The company reported a negative gross profit of $228 million last quarter, which included $31.5 million from credit sales [11][12]. - Without the revenue from regulatory credits, Lucid would have faced additional losses, highlighting the importance of this profit source [12]. Group 3: Regulatory Credits Impact - Lucid has generated $31.5 million in revenue from selling regulatory credits last quarter and has over $200 million in credits available [7][8]. - The potential elimination of federal automotive regulatory credits poses a risk to Lucid's profitability, as these credits have been a significant source of profit [8][11]. - However, existing accrued credits are expected to remain sellable at high profit margins, and state-level programs may be less affected by federal changes [10].

Core Viewpoint - RBC Capital has raised its Tesla stock price target from $307 to $319, maintaining an Outperform rating, reflecting confidence in the company's performance and market position [1]. Group 1: Stock Performance and Analyst Ratings - The new Tesla stock price target of $319 is 8.5% above the average analyst prediction of $294 based on aggregate ratings [2]. - Analyst Tom Narayan noted that Tesla met analyst expectations with 384,000 vehicle deliveries in Q2, aligning with company-polled consensus [1]. - Tesla's market capitalization stands at $959.23 billion, reinforcing its leadership in the automotive sector [1]. Group 2: Financial Projections - RBC Capital projects Tesla's automotive gross margins, excluding regulatory credits, to reach 13.7% in Q2, slightly above the consensus estimate of 13.4% [3]. - For the end of the year, automotive gross margins (ex-credits) are anticipated to be 13.6%, which is slightly below the average forecast of 13.9% [3]. Group 3: Delivery Expectations - RBC Capital predicts a 7% year-over-year decline in Tesla's total vehicle deliveries, which is a more optimistic outlook compared to the broader market prediction of an 8% decline [4].

Core Viewpoint - The "Big Beautiful Bill" supported by President Trump and Congress is expected to negatively impact Tesla by increasing costs for consumers purchasing electric vehicles and reducing credits for EV companies [1][3]. Group 1: Analyst Downgrade - William Blair analyst Jed Dorsheimer downgraded Tesla stock from "Outperform" to "Market Perform" without providing a price target [2]. - Dorsheimer believes the recent bill could be too challenging for Tesla stock to recover from [3]. Group 2: Impact of the Bill - The removal of the $7,500 EV tax credit for consumers is anticipated to reduce demand for Tesla vehicles, while the elimination of corporate average fuel economy (CAFE) fines was unexpected and necessitates a reset [3][4]. - Dorsheimer noted that Tesla earned $2.8 billion from selling regulatory credits in 2024, which constituted 16% of its total gross profit, and the loss of these credits could significantly affect profitability [4]. Group 3: Revenue and Demand Concerns - It is estimated that 75% of Tesla's regulatory credit revenue is tied to CAFE standards, which will be eliminated by 2027 [5]. - The combination of weakened demand and reduced profits from regulatory credits may create substantial challenges for Tesla, particularly in the fourth quarter [5]. Group 4: Investor Sentiment and Stock Performance - Dorsheimer indicated that investors may be growing weary of distractions from CEO Elon Musk, especially when the business requires his focus [6]. - Tesla stock is currently trading at an enterprise value of 76 times its lowered 2026 EBITDA estimates, reflecting investor concerns [6]. - As of the latest trading session, Tesla stock increased by 1.3% to $297.81, but it has declined by 20.4% year-to-date in 2025 [7].

Core Viewpoint - Tesla shares are experiencing significant pressure following a downgrade by William Blair, with the stock price dropping below $300 in pre-market trading, indicating investor concerns about demand and profitability due to recent policy changes [1][4]. Group 1: Stock Performance - Tesla shares closed at $315.35 but fell 6.5% in pre-market trading, reaching around $294 [1]. - The downgrade has led to a sharp decline in stock price, reflecting market reactions to the news [4]. Group 2: Analyst Downgrade - William Blair downgraded Tesla's rating from 'Outperform' to 'Market Perform' due to anticipated demand issues following the removal of the $7,500 U.S. EV tax credit and the elimination of corporate average fuel economy (CAFE) fines [4][6]. - Analyst Jed Dorsheimer highlighted that the loss of the EV tax credit could negatively impact demand, but the more pressing concern is the potential loss of over $2 billion in profit from regulatory credits, which would directly affect Tesla's profitability [5][6]. Group 3: Investor Sentiment - Investor sentiment is further strained by CEO Elon Musk's political ambitions, which have raised concerns about his focus on Tesla during a critical period for the company [7][8]. - Dan Ives, a long-time Tesla analyst, noted that investors are feeling a "sense of exhaustion" regarding Musk's political involvement, which contrasts with their expectations for his focus on the company [8][9].