Analysts raise Tesla's stock price target after news of robotic rental cars breaks

Elon Musk resonance really doesn't like Alexandre de Moras.

Tesla (TSLA) The mat exec took to X (formerly Twitter, the microblogging platform he bought in 2022) to express his anger at de Moraes, a Brazilian Supreme Court judge who has named him the target of an ongoing investigation into the spread of fake news.

"Soon, 𝕏 will publish all the claims made by @Alexandre and how they are against Brazilian law," Mass resonance said in an April 7 post." This judge has blatantly and repeatedly betrayed the Constitution and the Brazilian people. He should be dismissed or impeached. Shame on @Alexander!"

According to the Associated Press, the judge also opened a separate investigation into the alleged obstruction of justice by Mass resonance.

Meanwhile, Tesla settled a lawsuit filed by the family of a Silicon Valley engineer who died in 2018 in a crash on a San Francisco Bay Area freeway while relying on the company's semi-autonomous driving software, the Associated Press reported.

Tesla did not disclose the amount it paid to settle the case in court documents filed on April 8, the day before the crash case went to trial.

Tesla said in a court filing requesting a confidential amount that it agreed to the settlement to "end years of litigation."

Walter Huang's family filed a negligence and wrongful death lawsuit in 2019, holding Tesla responsible for repeatedly overstating the capabilities of Tesla's self-driving car technology.

Analysts are trying to reassess Tesla.

Pool/ Getty Images

Low-Cost Electric Cars Allegedly Scrapped by Tesla

While Wong's family admits he was distracted while driving the car, they believe Tesla is at fault because it falsely marketed Autopilot as self-driving software.

Late last month, Mas reson told Tesla employees that its North American operations would "mandate" the installation and activation of fully automated driving software in new Tesla vehicles, and would take customers on short test drives before delivery.

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The world's largest electric car maker has been battling disappointing deliveries, increased competition from China and slowing electric car sales.

Analysts are noticing the challenges facing the company and are reevaluating their assessment of the company.

Tesla's stock price recently took a dive after a Reuters report claimed that Tesla canceled its highly anticipated low-cost electric car.

The decision to scrap the cheaper models was made in February, Reuters said, citing three unnamed sources familiar with the situation and internal company documents.

The report said the move was partly due to internal adjustments within the company to focus more attention on developing a fleet of robotic axles.

Mars resonance posted on X on April 5 that "Reuters is (once again) lying."

According to Reuters on April 9, Tesla founder and former chief executive officer Martin Eberhard said it was "shameful" to hear that Tesla had canceled its low-cost car program.

"We've all seen in the news that Tesla has delayed or canceled the 耑Model 2 program, which is a shame for them, but it also shows that there is an opportunity in China for it to really catch on there," Eberhard said at the HSBC Global Investment Summit in Hong Kong.

Morgan Stanley analyst Adam Jonas points out that the timing of the Reuters report coincides with the announcement this month that Tesla will launch a robotic rental car on August 8th.

Confirming Morgan Stanley's Hold rating and $310 price target for Tesla stock, Jonas said he's been writing about investment considerations for Tesla's potential robot taxi business since he started working on his "Tesla Mobility" model in 2015. At the time, Tesla's market capitalization was less than $30 billion. Its current market capitalization is more than $550 billion.

"We had (incorrectly) predicted that the company would officially launch a highly automated ride-sharing service as early as 2018," he wrote." Nearly a decade later, we're still waiting."

Analyst: Road to robotaxis 'long overdue and unstable'

This analyst says August 8 will provide some important clues.

While Tesla has many attributes that "could make it a strong contender (if not an outright winner) in the autonomous driving race," Jonas said, we think the more substantial commercial model for the business will be well beyond 2030.

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The analyst warned that the road to commercialization of a "real robot shaft" without the "real robot shaft" of Bubba Pang will be "long and unstable".

Jonas expects that, over time, investors will witness a shift in Tesla's business model to a more asset-light, software-based, recurring revenue model. He wonders if robotic rental cars could be the first step in transforming the core business.

On April 2, Tesla announced first-quarter deliveries that were much lower than expected.

Tesla said in a statement that it delivered 386,810 new vehicles in the three months ending in March, down 8.51 TP3T from the same period last year and down 201 TP3T from the record 484,507 in the three months ending in December.

Analysts' forecasts for deliveries range from 425,000 to around 470,000 units, with LSEG's data suggesting a target of around 455,000 units for March.

When it did, Wedbush analyst Dan Ives described the outcome as "an unmitigated disaster."

Despite the potential of robotic taxis, Goldman Sachs lowered its price target for Tesla from $190 to $175, while maintaining a Neutral rating on the stock.

The firm attributed Tesla's weakness to unfavorable factors on both the production and competition/market sides. Goldman Sachs is bullish on Tesla's long-term growth potential and market position, but believes that Tesla's valuation is too high and its near-term fundamentals are weak, which undermines Goldman Sachs' bullishness on Tesla.

UBS analyst Joseph Spak told investors that Tesla's vehicle unit growth rate could be challenged in the coming years, according to the investment firm's 2024 Global Electric Vehicle Survey.

Although Tesla maintains its leading position among global battery-electric vehicle brands, with 39%, Sparkon said, he believes this result is unfavorable for Tesla's unit growth in the coming years. This takes into account the results of the survey outside of China, the continued low demand for electric vehicles in China, and more intense competition.

UBS did not change its neutral rating or $160 price target on Tesla.

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