RBC Capital Markets has reduced its price target for Tesla from $440 to $320, following a trend of downward revisions by various analysts. Despite this adjustment, analyst Tom Narayan suggests that this new target still represents a 34% potential upside for investors. The lowering of the target reflects decreased expectations surrounding Tesla's Full Self-Driving capabilities and increasing competition in foreign markets, particularly in China and Europe, where Tesla is losing market share. Meanwhile, Narayan maintains an 'Outperform' rating on Tesla shares, viewing some delivery concerns as overblown.
"We now assume Tesla FSD pricing drops to $50/month in 2026 from $100/month today," noted the RBC analyst.
"In China, in particular, competition is intensifying. Further, on robotaxis, we think it likely that domestic OEMs will dominate the market."
"Although sales fell sharply in Europe (45% in January) and China (60% in January and 21% in February), these regions represent a small portion of Tesla's total sales compared to their annual figures."
"While we do think it unwise to extrapolate too much from car demand dynamics, Tesla is losing market share in Europe and China."
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