Shulou(Shulou.com)11/24 Report--

An analyst report issued Tuesday by Evercore ISI, a Wall Street investment firm, lowered the target price of electric car maker Tesla from $300 to $200, mainly because of concerns about demand for electric vehicles in the market. Analysts say Tesla needs to launch a low-cost Model 2 electric car to get the stock "back on track."

Tesla shares have fallen more than 60% so far from their November 2021 highs. Analysts cut their target price by about a third to $200 from $300, though it is still about 40 per cent higher than the current share price.

Analysts wrote in the report that while global scale, vertical integration of supply chains and the U.S. inflation reduction bill continue to give Tesla, the market leader in electric vehicles, a gross margin advantage,"it is impossible to ignore that investors are fully aware of these benefits and must now struggle with demand assumptions for 2023 to 2025." "

Tesla shares have been under intense pressure this year, and CEO Elon Musk continues to sell shares.

Tesla shares fell 5 percent to $142 Tuesday. Evercore ISI's report noted that Tesla shares had lost support at the key technical level of $150 to $163.

"Investors are also revisiting demand assumptions for the first time as global inventories run down," the report said. Analysts also said that while the biggest challenge facing Tesla's stock price was Musk's acquisition of Twitter, there are now more factors dragging the stock upward. The downside "was initially thought to be about 75 percent 'Twitter noise' and 25 percent market demand. "

Musk has recently come under fire for buying social media company Twitter. Tesla investors are increasingly concerned that Musk's current job as Twitter CEO will distract him from Tesla.

But Evercore ISI also points out Tesla's way of reversing the decline. Analysts believe that Tesla will attract more consumers as long as it introduces a lower-cost Model 2 electric car. The Model 2 reportedly starts at $25,000. Musk said it would take a long time to launch the electric car.

"What we want to see is getting back on track…Simply put, the Model 2, out of the 2.7 million Tesla electric vehicle demand, we count 500,000 Model 2s, which of course are not yet available." Markets such as the European Union are desperate for smaller, cheaper models. "

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