Is a cold winter approaching for Tesla? Global user interest declines, UBS once again issues a "sell" rating

Global consumer interest in the Tesla brand continues to decline, and Wall Street investment bank UBS maintains a "sell" rating, indicating that Tesla may be facing unprecedented challenges.

According to news from the Chase Wind Trading Desk, UBS released a global electric vehicle consumer survey report on May 27, 2025, showing that global consumer interest in the Tesla brand is continuously declining. In the three core markets of China, the United States, and Europe, Tesla is facing a decline in brand appeal.

The survey report also pointed out that more concerning is the bleak outlook for Tesla's autonomous driving business, with its profit model facing challenges. Consumers' willingness to pay for autonomous driving features is limited, with only 12% of respondents willing to pay more than $7,600 for autonomous driving features, while Tesla's FSD is currently priced at $8,000.

Based on this trend, UBS maintains a "sell" rating on Tesla stock, with a target price of $190, indicating a 44% downside potential from the current stock price of $339.34. This year, UBS has already lowered Tesla's target price multiple times, reducing it to $225 in March and to $190 in April.

UBS expects Tesla's earnings per share in 2025 to be $1.54, far below market expectations, reflecting the current situation of slowing global electric vehicle demand and increasing competition.

Global Consumers Turning Away from the Tesla Brand

The survey results show that Tesla's global appeal is systematically declining, specifically:

Globally, the proportion of consumers considering purchasing a Tesla has dropped from 39% last year to 36%.

The proportion of consumers selecting Tesla as their preferred pure electric vehicle brand has significantly decreased from 22% to 18%.

In the U.S. market, although Tesla still maintains about 48% of the pure electric vehicle market share, the proportion of consumers selecting it as their preferred brand has plummeted from 38% last year to 29%, a drop of 9 percentage points.

UBS analysts believe this is mainly due to issues such as market saturation and a limited product line for Tesla.

In China, the largest electric vehicle market, Tesla's situation is even more severe.

The survey shows that the proportion of Tesla as the preferred brand among Chinese consumers has dropped from 18% to 14%, not only being surpassed by BYD but also falling behind emerging brand XPeng

More critically, Tesla's position as a technology leader in the eyes of Chinese consumers is waning. BYD is now seen as the technology leader, while Xiaomi Auto is emerging rapidly as a new star, with growth momentum that cannot be ignored.

Surveys show that although Tesla still maintains some advantages compared to other foreign brands, Chinese consumers are clearly more inclined to purchase domestic brands.

In the European market, Tesla also faces challenges. Tesla's brand consideration has dropped to 33%, surpassed by Audi and BMW. The proportion of consumers who consider it their preferred brand has also fallen from 20% to 15%, a decline of 4.6 percentage points.

It is noteworthy that traditional luxury brands like Audi and BMW have surpassed Tesla in brand consideration, indicating that European consumers' confidence in electric vehicle products from traditional automakers is recovering.

UBS analysts believe that Tesla's brand damage in the European market may be related to Musk's political involvement. The survey period coincided with a politically sensitive time from late January to mid-February 2025.

High Pricing of Autonomous Driving Features

The survey also revealed issues with Tesla's pricing strategy for autonomous driving features. The report shows,

Only about 12% of consumers are willing to pay a one-time fee of over $7,600 for autonomous driving features, while Tesla's FSD (Full Self-Driving) feature is priced at $8,000.

In terms of subscription models, only about 18% of consumers are willing to pay more than $100 per month, while Tesla's FSD monthly subscription fee is $99.

UBS stated that this pricing mismatch with consumers' willingness to pay may constrain Tesla's growth potential in software service revenue.

From the perspective of pricing affordability, different markets show a differentiated situation.

In the United States, the starting price of the Model Y is about $45,000, which fits the budget of about half of consumers;

In China, the starting price of the Model Y is 263,500 yuan, which fits the budget of about 58% of consumers;

In Germany, the starting price of 45,000 euros fits the budget of less than 37% of consumers.

UBS analysts pointed out that although the market is full of expectations for Tesla's Robotaxi and humanoid robot business, the challenges facing the electric vehicle business cannot be ignored, especially the potential cancellation of California's exemption policy, which would threaten its profitability and cash flow