Wells Fargo & Company: Tesla, Inc. (TSLA.US) delivers profits with double softness, Cybercab production difficulties trigger a slashing of target price to $130.

Wells Fargo & Company released its latest research report on Tuesday, announcing a downgrade of Tesla, Inc. (TSLA.US) stock rating from "Neutral" to "Underperform" with a significantly reduced target price of $130, a 51% drop from the Tuesday closing price of $268.46. The bank's star analyst Colin Langan and his team continue to predict a decline in Tesla, Inc.'s delivery growth and anticipate that price cuts will impact the company's profit margins. Due to the potential stock decline, Tesla, Inc. stock has been added to Wells Fargo & Company's tactical idea list. The report points out that as electric vehicle penetration rates in the United States and Europe approach saturation and competition from Chinese domestic brands intensifies, Tesla, Inc. is lacking in effective means to stimulate sales in the short term. A particular warning is given that if the Biden administration cuts the $7,500 electric vehicle tax credit in the second half of the year, demand will be further suppressed. In response to competition, Tesla, Inc.'s global pricing strategy is now impacting profits. The bank predicts a 25% year-over-year drop in earnings per share (EPS) by 2025, with gross margins potentially falling below the critical support level of 20%, more than halving from last year's historical high of 31%. Regarding Elon Musk's highly anticipated Robotaxi autonomous taxi business, the report raises sharp criticisms: the Autopilot system, which relies heavily on visual solutions, has significant safety loopholes, and the Cybertruck manufactured at the Austin Gigafactory has faced multiple delivery delays. Langan emphasizes that "if a commercial fleet cannot be established by June, market confidence is likely to be severely damaged". It is worth noting that despite Tesla, Inc.'s stock price rising by 6.2% on Tuesday, it has still fallen by 37% so far this year, nearly forty percent lower than its historical high of $488.54 last year.