Bank of America analysts are divided on Tesla’s (TSLA) outlook, following recent advancements and challenges tied to the company’s innovative technology. While analysts from BofA provided fresh insights after the CES event, Citibank analysts have voiced positive sentiment about Stellantis, sparking some skepticism about Tesla’s trajectory.
On January 7, we reported that the National Highway Traffic Safety Administration (NHTSA) initiated an investigation into Tesla’s “Actually Smart Summon” (ASS) feature, which Elon Musk insists on naming with the controversial acronym. The technology was designed to allow Tesla owners to summon their vehicles from a distance, showcasing the company’s push toward autonomous driving. However, despite the feature’s futuristic appeal, the technology has faced scrutiny. Social media videos have surfaced showing both successful and hazardous incidents, with some accidents resulting from the system failing to detect obstacles, such as parked cars.
The NHTSA’s Office of Defects Investigation cited a complaint about a crash involving ASS and three other media-reported incidents where the feature malfunctioned. In all cases, vehicles failed to stop in time, raising concerns about the technology’s reliability.
Despite these concerns, Bank of America analyst John Murphy issued a report downgrading Tesla’s stock while raising its price target from $400 to $490. Although Murphy acknowledged that the stock price reflects much of Tesla’s long-term potential, he pointed out several risks associated with the company’s future. He identified key potential catalysts—such as the launch of a low-cost model and a robotaxi service by mid-2025—along with risks tied to their execution.
Additional risks outlined by Murphy included increasing competition in China, weakening EV demand, delays in product launches, regulatory changes, and the uncertain future of autonomous driving regulations. Furthermore, Murphy emphasized that Tesla’s vehicle lineup is aging and needs a refresh to maintain demand, especially as EV market growth slows.
In summary, while Tesla’s technological ambitions remain high, its short-term stock prospects appear clouded by execution challenges and increasing competition.
Related topics:
Oil Hits Three-Month High Amid Tight Supply and Market Optimism
Geely Aims for 79% Growth, Eyes 5 Million Annual Vehicle Sales by 2027
Asian Currencies Plunge to Two-Decade Low as Equities Navigate Volatile Terrain
