Although Tesla (TSLA) has experienced significant volatility in its stock price over the past year, its overall performance remains strong, with a cumulative increase of approximately 37% over the past 12 months. However, some skeptics believe that the valuation of this leading electric vehicle company may face a substantial correction.
In early January, HSBC analyst Michael Tyndall reiterated a “reduce” rating on Tesla in a report and set a one-year price target of $131 per share. At the time of writing, Tesla’s stock price was around $373 per share. If the HSBC target is reached, it would imply a potential decline of approximately 65%. Tyndall believes that although the recent rise in Tesla’s stock price has been primarily driven by concepts such as robotaxis and humanoid robots, the valuation pressure stems more from the trend of regionalization in the core electric vehicle market. He pointed out that consumers in markets including China and the European Union are increasingly favoring local brands, and recent sales data from Tesla and other U.S. electric vehicle manufacturers suggest that their global growth opportunities may be far lower than expected. Affected by weak international demand, Tesla expects its vehicle deliveries to decline by 8.6% in 2025, with total revenue dropping by approximately 3%. If sales continue to decline, the stock price may face pressure until other growth businesses make more stable progress.
Meanwhile, Wedbush Securities is focusing on Tesla’s long-term strategic layout. The firm anticipates that Tesla and SpaceX will complete a merger in 2027. Analyst Dan Ives noted that the foundation for combining the two companies has already been laid. Earlier this year, Tesla invested $2 billion in xAI, and after xAI was acquired, the investment was converted into SpaceX shares, giving Tesla a partial stake in SpaceX, although this stake currently represents less than 1% of SpaceX’s expected valuation. Ives believes that the recent joint announcement by the two companies to build the Terafab superfactory has further deepened their business integration, thereby increasing the feasibility of merging operations. He stated that although such a move would face multiple regulatory hurdles from the Federal Trade Commission and the Department of Justice, Musk’s ultimate goal remains to gradually acquire a 25% stake in Tesla as the company enters its most important growth phase in history. Merging SpaceX with Tesla in some form is a key pathway for him to expand his control over the artificial intelligence ecosystem.
Historically, Tesla has outlined its strategic vision through the release of “Master Plan” documents. The first Master Plan, unveiled in 2006, sketched a roadmap from high-end electric sports cars to affordable electric vehicles. The second chapter, released in 2016, expanded the scope to include a vehicle lineup, solar roofs, and an autonomous ride-hailing network. The third chapter, published in 2023, focused on a sustainable energy economy. The fourth chapter, announced in 2025, set the next phase’s focus on “sustainable abundance” and large-scale industrial transformation.
