HSBC analyst Michael Tyndall maintained his Reduce rating and $131 price target on Tesla, implying a 70% downside from Friday’s closing price of $438.07.
In a research note published Sunday, Tyndall said fourth-quarter deliveries missed expectations and the company’s lower-priced Standard models failed to offset weakening demand following the expiration of US EV tax credits.
Tesla delivered 418,227 vehicles in Q4 and produced 434,358 units. The Elon Musk-led company delivered 1,636,129 vehicles in 2025, down 8.6% from 1,789,226 units in 2024 — marking Tesla’s second consecutive annual decline.
Chinese rival BYD overtook Tesla as the world’s best-selling fully electric vehicle brand in 2025, despite not selling in North America.
BYD sold 2.26 million BEVs for the full year, up 28% from 2024.
“Q4 deliveries of 418k units were below Visible Alpha consensus by 3.7%, our estimate by 5.2%, and company-collated consensus by 1.1%,” Tyndall wrote in the research note. “As a result, deliveries decreased nearly 16% y-o-y and q-o-q.”
“The end of EV credits in the US will have been a factor and it seems the more affordable Standard models failed to fill the gap,” the analyst added.
Tesla launched lower-priced Standard versions of its best-selling Model 3 and Model Y in Europe and the US in 2025 to boost demand amid intensifying competition.
In Europe, the Standard Model Y is priced approximately €5,000 below the higher-end version.
Global Weakness
Tyndall noted that Tesla‘s struggles extended beyond the US market.
“The issues don’t appear to be purely US, as high-frequency data for Europe and China suggest volumes were weak in both these regions too,” he wrote.
The analyst said the global EV market is becoming increasingly regionalized, with headwinds in multiple geographies.
“The global BEV market is becoming more regionalised, with US adoption stalling and competition increasing in both Europe and China,” Tyndall wrote.
“Anti-involution measures in China and the extension of trade-in subsidies should be supportive for demand, but in Europe rising competition (both domestic and imported) is likely to see Tesla continue to lose share,” he added.
Production Build
Tesla produced 434,358 vehicles in Q4, roughly 16,000 units above deliveries.
“Production was 434k, or c16k above deliveries, which seems to suggest Tesla expects growth to pick up in Q1 2026, but it is hard to identify what might underpin that,” Tyndall wrote.
Energy Storage Bright Spot
While the vehicle business struggled, Tesla’s energy storage division posted record deployments of 14.2 GWh in Q4.
“Storage deployed came in strong at 14.2 GWh, or 4.7% above VA consensus and 7.5% above our estimate,” Tyndall noted.
Contrasting View
Wedbush analyst Daniel Ives offered a more optimistic take on Friday, saying Tesla’s deliveries came in “slightly below the company’s consensus delivery estimate of 422.9k but much better than the whisper numbers of ~410k” units.
Ives, one of Wall Street’s most bullish Tesla analysts, maintained his Outperform rating and $600 price target.
Tesla shares hit an all-time high above $498 on December 22 and have fallen approximately 12% since then.
