Baird reiterates Tesla's "Neutral" rating as weak automotive business leads to lowered delivery expectations

Zhitong
2025.09.01 03:18
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Baird analysts reiterated Tesla's "neutral" rating and lowered their delivery and regulatory credit expectations for the second half of 2025, citing weakness in its automotive business. Analysts believe the market has overly high profit expectations for Tesla and are calling for the company to clarify the timelines for its autonomous taxi and Optimus projects. Tesla faces legal and regulatory challenges, with a court ruling that it misled consumers regarding its full self-driving system, reflecting increasing scrutiny on the ethical deployment of AI systems. Analysts emphasize that Tesla needs to transparently disclose its profit pathways and the timelines for technology commercialization to stabilize market expectations

According to the Zhitong Finance APP, Baird analysts reiterated their "Neutral" rating on Tesla (TSLA.US) and lowered their delivery and regulatory credit expectations for the second half of 2025, pointing out that signs of weakness are emerging in its automotive business. The analyst believes that market expectations for Tesla's profitability remain overly high and calls for the company to clarify the specific timeline for its autonomous taxi and Optimus projects.

Currently, Tesla is facing multiple legal and regulatory challenges. A class action ruling approved by a California judge in August 2025 accuses Tesla of misleading consumers about the capabilities of its Full Self-Driving (FSD) system for up to eight years. This ruling resonates with a 2019 settlement involving a $329 million crash related to the autopilot, marking a significant shift in the judiciary's approach to autonomous driving liability—courts are beginning to hold automakers accountable for marketing practices that create a "false sense of security," while still emphasizing that drivers must fulfill their duty of care.

It is understood that lawsuits in Florida further expose systemic flaws in Tesla: it is accused of delaying critical safety updates and promoting its Autopilot system, which only has partial driver assistance capabilities, as "nearly autonomous." These rulings reflect a tightening scrutiny from regulators regarding the ethical deployment of artificial intelligence systems, and investors need to be wary of the systemic impacts brought about by corporate governance flaws and AI technology ethical risks.

Legal risks have transcended the realm of stock price volatility. In addition to class actions and regulatory investigations, the "perfect storm" of punitive damages is reshaping the framework of autonomous driving liability. Analysts emphasize that Tesla needs to stabilize market expectations by transparently disclosing its profitability path and the commercialization timeline of its autonomous driving technology, especially regarding the autonomous taxi and Optimus humanoid robot projects, where clear technological milestones will become key criteria for capital markets to assess its long-term value

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