HSBC Reiterates Tesla Reduce Rating, $131 Target Price, Massive Potential Downside

TradingKey - Recently, HSBC analyst Michael Tyndall has continued to maintain a cautious stance on Tesla ( TSLA ), reiterating a "Reduce" rating on the stock and setting a 12-month price target of $131. Based on related reports, this target implies that Tesla's share price still has approximately 65% to 70% downside potential.

HSBC's latest view is not a sudden pivot. As early as January this year, Tyndall maintained this judgment in a research report, noting that Tesla's fourth-quarter delivery data fell short of expectations and that the company's introduction of lower-priced Standard models failed to effectively compensate for the weakening demand following the end of U.S. EV tax credits.

At the market level, such a rating implies that although Tesla remains one of the world's most closely watched auto stocks, institutional divergence regarding its short-to-medium-term growth pace, earnings quality, and pricing framework is widening.

HSBC's assessment also reflects a more practical reality: it is not easy for Tesla to sustain a high valuation amid intensifying competition, demand volatility, and a shifting policy environment.

While most market investors are currently focused on future opportunities such as Tesla's newly launched Terafab project and humanoid robots, HSBC believes that Tesla's core business is still electric vehicles, and that is where the issues are surfacing.

For investors, the $131 price target is not just a number, but rather a clear risk warning. Until Tesla's fundamentals prove themselves again, its stock price may continue to face dual pressure from earnings expectations and valuation reassessment.