Tesla (NASDAQ: TSLA) stock fell over 3% in intraday trading Thursday to hit a new 52-week low on Thursday following a Deutsche Bank downgrade. The bank cited CEO Elon Musk’s decision to prioritize its robotaxi initiative over its more affordable next-generation vehicle, as the primary reason for the downgrade.
Emmanuel Rosner, the analyst at Deutsche Bank, dealt a blow to Tesla stock on Thursday, downgrading it from a buy to a hold rating and slashing the firm’s price target to $123 from $189. The downgrade comes as Rosner sees a “high likelihood” of the $25,000 Model 2 facing delays and Tesla’s strategic focus shifting toward the development of a robotaxi, an autonomous car.
Rosner explained the previous buy rating was based on the expectation that Tesla’s next-generation vehicle priced at $25,000 would arrive in late 2025, enabling the company to ramp up volume, margins, and free cash flow.
However, Rosner now believes Tesla’s future hinges on its ability to achieve full driverless autonomy, a task he describes as a “significant technological, regulatory, and operational challenge.” The analyst notes that the shift towards robotaxi represents a “thesis-changing” moment for Tesla, potentially leading to a “painful transition in ownership base,” with electric vehicle (EV) investors reconsidering their positions and being replaced by AI/tech investors with longer time horizons.
Meanwhile, Cathie Wood and her Ark Invest funds have been actively increasing their holdings of Tesla. According to daily trade disclosures, Wood acquired 20,683 shares of Tesla on Tuesday and an additional 66,504 TSLA shares on Wednesday. This accumulation reflects her long-standing optimism about advancements of Tesla in autonomy and robotaxi.
Tesla (NASDAQ: TSLA) Stock Reaction
At the time of publication, TSLA stock has dropped 3.55% to $149.93 compared to the previous trading session. Traders have exchanged 94.16 million shares, lower than the average daily trading volume of 101.60 million.
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