The one thing you could always say about electric car giant Tesla (TSLA) is that it always had something on the back burner. If interest started to wane in its cars, it was a huge potential winner in batteries, and that—particularly given the state of the power grid—was not nothing. But Tesla is down 1.5% in Tuesday’s trading, as it is in something of a state of flux.
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There is good news and bad for Tesla right now, according to Sherwood. Tesla both is, and is not, the top choice for American electric vehicle buyers these days. How can that be? Oddly, simply: it currently has the biggest market share in the United States by total buyer count, but most do not consider Tesla to be their first choice.
In fact, 21% of electric vehicle buyers say their brand of choice is actually Toyota (TM). Yet despite this, 44% of electric vehicle sales in the United States came from Tesla. With Tesla sales in open decline, however, as well as a clear interest in supporting other brands, it remains to be seen how long Tesla sales will hold out on top. This is especially true as it annoys the car-buying public with delays on an affordable model and a product line increasingly viewed as stale.
But Then, There’s Always….
It was not so long ago that many looked to Tesla not just for cars. There was the matter of the batteries as well. It turned out the same batteries that powered Tesla cars could also be used to power houses, and whole-house power generation is especially popular given the nature of the power grid these days.
Piper Sandler recently offered a note that said Tesla was on the rise for its artificial intelligence (AI) developments as well. In about a year, noted Piper Sandler analyst Alexander Potter, investors should have much greater clarity on Tesla’s full self-driving (FSD) ambitions, as well as how AI factors into this. And with a CNBC report noting that Tesla lost over $15 billion in brand value in 2024—thanks mainly to that aging product line—the end result is a whole lot less value.
Is Tesla a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 13 Buys, 12 Holds, and nine Sells assigned in the past three months, as indicated by the graphic below. After a 100.14% rally in its share price over the past year, the average TSLA price target of $329.63 per share implies 21.28% downside risk.
