• Wells Fargo forecasts a 61% plunge in Tesla's stock to $120, citing weakening automotive sales and margin pressures.
  • May global deliveries fell 23% YoY, with aggressive financing promotions squeezing Q2 profitability.
  • Upcoming robotaxi launch seen as insufficient to offset core business challenges, despite some analyst optimism.

Tesla's Mounting Headwinds

Tesla's stock could crater to $120, Wells Fargo warned in a stark reassessment of the EV maker's prospects. Analyst Colin Langan highlighted a troubling 23% year-over-year delivery decline in May, underscoring weakening demand for Tesla's core automotive products. The bearish call sent shockwaves through markets already rattled by Tesla's 22% year-to-date decline, with shares last trading at $315.94.

"The financing promotions are becoming increasingly aggressive," said one industry insider familiar with Tesla's sales tactics. "They're buying market share at the expense of margins." Efforts to reach Tesla for comment on the Wells Fargo report were unsuccessful.

Diverging Analyst Views

While Wells Fargo sounds the alarm, other firms maintain more optimistic stances. Morgan Stanley recently issued a buy recommendation, though LSEG data shows a consensus 'Hold' rating with a $285.97 average price target. Wedbush's Dan Ives, after cutting his target earlier this year, has since revised it upward again.

Market sentiment remains fractured, with the Fear & Greed Index registering 39 ('Fear') amid 9.21% price volatility over the past month. Some technical analysts suggest Tesla's movements reflect news-driven sentiment rather than fundamentals - a concerning pattern for long-term investors.

Make-or-Break Moments Ahead

All eyes now turn to Tesla's June 12 robotaxi unveiling, though Wells Fargo doubts this will reverse the negative trajectory. "Without a meaningful turnaround in automotive fundamentals, these initiatives won't move the needle," Langan noted.

The company faces a perfect storm: intensifying Chinese competition, potential Trump-era tariff disruptions, and cooling consumer demand. Yet some see value at current levels - CoinCodex suggests the stock trades 4.51% below fair value, with potential for significant returns by November.

As Tesla's leadership navigates these crosscurrents, investors face starkly different interpretations of whether this marks a buying opportunity or the start of deeper declines. The robotaxi event may provide clarity, but for now, the bears appear to have the upper hand.