Street View: Tesla's EV ride hits a rough patch

Tesla TSLA.O said on Wednesday cuts in support from U.S. government to EV makers could lead to a "few rough quarters" before revenue from self-driving software and services begins late next year

Co said it has started initial production of a more affordable model and expects volume production in second half of 2025

Shares down 6.4% at $311.2 in premarket trading

ROBOTAXI RHETORIC VS. REVENUE REALITY

Morgan Stanley ("overweight", PT: $410) says Tesla is moving toward autonomy while managing weaker volumes, lost EV incentives, tariff pressures and long-term investments that may not boost margin for years

Barclays ("equal weight", PT: $275) says Tesla's near-term fundamentals are weakening on expiring tax credits, tariffs, and lower regulatory credit sales, but long-term AI and Robotaxi narrative continues to support the stock's valuation

RBC Capital Markets ("outperform", PT: $319) sees Tesla's Q2 gross margin beat (ex-credits) as positive, but flags weak energy/storage revenue and lack of delivery outlook while viewing the affordable EV launch and robotaxi expansion as key potential catalysts

Morningstar ("fairvalue: $250") says Tesla faces slowing growth and shrinking margins on rising EV competition, especially from BYD

Also, flags risks from Musk's political activities and delays in autonomous driving, which could hurt brand appeal and future profitability