Tesla fundamentals continue to soften, says Oppenheimer

Oppenheimer says that with investors now fully aware of the consumer backlash on CEO Elon Musk’s political activities and sales expectations for 2025 declining, the firm believes the next leg of the Tesla (TSLA) trade will be determined by the company’s ability to replace a portion of its consumer base while demonstrating progress on key autonomy and AI initiatives. Oppenheimer thinks datapoints on both variables are mixed and it maintains its negative bias near term. While the firm sees potential for a conservative customer base to emerge, it believes the company’s product line is not a great match plus its dealer/service infrastructure is not well positioned geographically to serve that demographic. Oppenheimer also remains concerned about recent high-profile departures and potential brain drain as the company’s brand becomes increasingly politicized. Oppenheimer has a Perform rating on the shares.