Robotaxi bubble warning + "political burden" drags Tesla down with downgrades from two major Wall Street institutions
Tesla has recently been downgraded to "Neutral" by two Wall Street firms, reflecting the company's short-term uncertainties and the market's overly high expectations for the upcoming autonomous taxi (Robotaxi). Analysts pointed out that the public dispute between Musk and Trump poses a reputational risk that could affect Tesla's outlook. Although Kallo still views Tesla as a long-term holding, there are multiple uncertainties in the short term, with the profitability of Robotaxi potentially falling below expectations and delivery volume forecasts also being revised downward
According to Zhitong Finance APP, Tesla (TSLA.US) has recently had its rating downgraded to "neutral" by two Wall Street firms, highlighting the short-term uncertainties the company faces and the market's "overly high expectations" for its upcoming Robotaxi release this week.
Analysts from Baird and Argus have withdrawn their bullish ratings on Tesla, citing market instability and the reputational risks stemming from Musk's public disputes with President Trump.
Ben Kallo from Baird stated in a research report to clients on Monday, "The recent conflict between Musk and President Trump underscores the key person risk associated with this CEO's political activities." He added that this situation adds "uncertainty to Tesla's outlook" and raises concerns about brand damage, which could persist "until there is concrete evidence of sustained sales growth."
Argus analyst Bill Selesky believes that recent developments indicate Tesla's stock price is being driven by "non-fundamental events," and the expiration of electric vehicle tax credits "may further weaken market demand for Tesla's new vehicles."
While Kallo still views Tesla as a "core long-term holding," he noted that there are too many uncertainties in the short term, including the market's "overly high expectations" for Robotaxi and the increasingly competitive environment.
Kallo stated that the advancement of the Robotaxi business "will be more challenging than expected, and its profitability is likely to be below some investors' overly optimistic estimates."
Additionally, Kallo has lowered his delivery forecast for the second quarter of 2026 from 404,800 units to 377,000 units to reflect the impact of the cancellation of electric vehicle tax credits
