Benchmark analyst Mickey Legg lowered on Wednesday Tesla‘s price target by 26.3% to $350. In a new research note, the firm maintained its Buy rating on the stock and added it to its ‘Best Ideas’ list.
Benchmark started covering Tesla‘s stock in February with a $475 price target and a Buy rating. Shortly before midday, the EV maker’s shares are rising 3% this Wednesday. Based on the last closing price of $221.86, the updated price target implies an upside potential of 57.8%.
“After appreciating over 90% to a high of $488 after the Presidential election, the stock has pulled back to sub-$300 levels”, the analyst noted. Benchmark believes “the recent stock pullback and sales declines, while significant, are overblown considering the near-term issues impacting the company and the scope of opportunities around the corner.”
Elon Musk’s involvement in both U.S. and European politics has caused protests against Tesla, with attacks spreading to several facilities and vehicles across North America and Europe. The U.S. Administration has recently involved the FBI with Tesla’s chief writing on X earlier this week that, “Those who financed the attacks against Tesla will go to prison.”
Tesla’s sales in Europe plunged dramatically in the first quarter of the year while global deliveries declined more than 12% year over year between January and March. The company’s stock has dropped 42.8% year to date.
Tesla’s New Model + Cybercab
Legg said Benchmark’s focus is “on the release of a new Tesla model” this quarter, “which in our view could turn around the recent decline in vehicle sales.”
The analyst added that the team is “cautiously optimistic about the rollout of Tesla operated robotaxis as a paid service in Austin”, which is set to launch in June as recently reaffirmed by Musk, and “on the rate of expansion of the operation … to other cities.”
After unveiling the Cybercab and Robovan models in October, the EV maker announced in January that the first unsupervised self-driving rides would start in June in Texas, with the Cybercab model, as it aims to “unlock safe & low-cost premium point-to-point electric transport.”
Benchmark’s analyst considers the service has the potential to be “a game changer” for the company, evolving it from “a vehicle manufacturer into a broad automation provider”.
During last October’s event, Tesla‘s CEO stated that the robotaxi would “probably” enter production before 2027 and is expected to cost less than $30,000. Late last month, Musk stated at a first quarter’s all-hands meeting that “Cybercab is not only a revolutionary car design but it’s also a revolutionary manufacturing process.”
Tariffs Impact
“We also believe Tesla is the least impacted by the recently imposed auto tariffs among the major automakers, producing all its North American vehicles in California and Texas,” Mickey Legg concluded.
Several Wall Street analysts have recently noted that the 25% tariffs on imported vehicles and auto parts hit Detroit automakers like Ford and GM the hardest. Musk stated in late March that the duties would “affect the price of parts in Tesla cars that come from other countries.”
However, the company builds all the cars it sells in the U.S. locally, so the impact on the company is much smaller.
Donald Trump confirmed the tariffs last week, setting a baseline of 10%, with much higher rates for certain countries — including China, where an already existing 20% tariff was increased by 34% and, a week later, by 50% more, as the world’s second largest economy retaliated.
Since then, the U.S. and China have entered a heated tit-for-tat over tariffs, each raising taxes on the other’s products. Global trade tensions have sent auto stocks tumbling since last Friday.
