Tesla’s (NASDAQ: TSLA) equity has been performing abysmally in recent weeks despite remaining nearly 37% above where it stood exactly 12 months ago.
Specifically, TSLA stock collapsed 50.40% since December highs and is 41.81% down in 2025 to its press-time price of $234.98.
Despite the rapid price collapse, many investors and analysts remain mostly optimistic about Tesla’s long-term prospects.
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On March 18, RBC Capital’s Tom Narayan exemplified this phenomenon when he reiterated the ‘outperform’ – buy – rating for the electric vehicle (EV) maker despite lowering the price target from $440 to $320.
While the forecast cut is significant, it is worth remembering that, given Tesla’s press time price, it still represents a 36.18% upside from TSLA’s share price at the moment.
Why RBC lowered the TSLA PT but kept the ‘buy’ rating
According to Narayan, the currently dominant narrative about the EV maker’s substantial drop in sales – shipments in Germany have collapsed more than 70%, and more than 90% of Germans say they will never buy a Tesla – is overblown.
Instead, the analyst justified his price target cut by explaining that he now believes the fruits of ‘full self-driving’ (FSD) and ‘Robotaxi’ will be lesser than expected.
Indeed, multiple car companies have been making their own strides in self-driving technology, meaning that Tesla’s offering will be far less unique than it would have been had the company fulfilled any of Elon Musk’s early promises regarding the technology.
Though Narayan is not concerned about Tesla’s drop in deliveries, the figures remain important for the EV maker in 2025.
Why delivery figures remain pivotal for Tesla
Along with technology, growth has been an important narrative justifying Tesla’s valuation. The EV maker is worth several times more than the second biggest car company in the world by market capitalization – Toyota – despite selling only a fraction of the cars.
If Elon Musk’s car company is no longer growing – it is worth remembering that 2024 proved to be the first year in which Tesla sales declined – and the technological moat appears increasingly trivial, investors would be right to question what justifies the stock price point.
Similarly, many found alarm bells ringing when Wedbush’s Dan Ives – one of the tech sector’s and Tesla’s biggest bulls – voiced his fears for TSLA arising from the South African-Canadian-American billionaire’s newfound political career.
The TSLA stock silver lining
Despite this, there remains a strong possibility the bullish experts will be proven right as Musk continues to enjoy the backing of exceptionally powerful entities and individuals. For example, as TSLA shares were collapsing in value, the White House organized an EV show, and President Trump pledged to purchase a brand-new Tesla as a show of support.
Still, the exact nature of the support can also be questioned as Elon Musk reportedly hinted he wanted to provide Trump-linked organizations with $100 million near the time his firm received the presidential endorsement.
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