Tesla stock has dropped about 39% this year, erasing all gains from the past year. The electric car maker is affected by declining sales and significant discounts aimed at attracting more buyers. Deutsche Bank downgraded Tesla’s stock rating from “buy” to “hold” on Thursday, lowering its target price from $189 to $123. The bank previously had a “buy” rating in hopes of Tesla launching the “Model 2” next year, a $25,000 electric car. However, due to Tesla focusing on self-driving robotaxis, the model is rumored to be canceled. Now, Deutsche Bank analyst Emmanuel Rosner writes that Tesla’s future is closely tied to “cracking the code for fully autonomous driving,” which presents “significant technological, regulatory, and operational challenges.” Rosner states, “We believe Tesla’s transformation changes our thesis and are concerned the stock will need to go through a potentially painful ownership base transition.” He notes that electric car investors may start to “throw in the towel,” being replaced by “AI/tech investors with longer time horizons.” As Tesla’s stock continues to decline, Musk’s personal wealth has shrunk by $59.2 billion this year, dropping to $170 billion as of Thursday’s close. The gap between him and Zuckerberg widens further, with the latter surpassing Musk on Wednesday to become the world’s third-richest person, with a net worth of $178 billion as of Thursday’s close.
