Bank Suggests Tesla Demand Concerns May Be “Exaggerated” Yet Lowers Price Target Amid FSD Issues

This article does not constitute investment advice. The author holds no positions in any of the stocks referenced.

Following another challenging day for Tesla’s stock, an investment bank has once again lowered its price target. The analysts believe apprehensions regarding the company’s vehicle demand may be exaggerated, yet they have adjusted their forecasts due to Tesla’s reduced market share in its Full Self Driving (FSD) platform and robotaxi service. In March, numerous investment firms have revisited their price targets for Tesla, citing concerns about expected declines in deliveries for both 2025 and 2026.

RBC Adjusts Price Target and FSD Pricing Estimates Amid Market Concerns

RBC Capital’s analyst, Tom Narayan, presents a unique rationale for his revisions regarding Tesla’s stock price target. While other analysts emphasize potential reductions in deliveries for the current year, Narayan is more concerned about the company’s ability to meet revenue projections for its FSD and robotaxi offerings.

Although immediate stock performance largely hinges on vehicle deliveries, analysts and investors recognize that Tesla’s long-term financial viability is also tied to the success of its FSD service and robotaxi initiatives, both of which are heavily reliant on artificial intelligence for autonomous transport.

According to Narayan, “Much of the attention around Tesla has centered on its recent delivery performance in Jan and Feb in Europe and China. We think fears of demand could be overblown, however.”Consequently, in its most recent analyst note, RBC has revised its projections regarding FSD pricing and robotaxi market penetration.

Central to RBC’s outlook is the increasing availability of autonomous driving technology, which they believe is becoming a standard offering among various original equipment manufacturers (OEMs).In prior estimates, RBC anticipated that Tesla’s FSD pricing would decrease to $50 per month in 2026, with potential increases to $100 by 2030, contingent on the availability of Level 4 autonomy.

However, RBC now projects that FSD pricing will drop to $50 per month next year, a significant reduction from the current $100. Consequently, the firm has adjusted its price target for Tesla from $440 down to $320, while maintaining an Overweight rating on the shares. Conversely, other analysts have echoed a more pessimistic stance regarding Tesla’s delivery performance for both the first quarter and the upcoming fiscal years.

A recent projection from Mizuho now forecasts that Tesla will deliver between 1.8 million to 2.3 million vehicles in 2025 and 2026, a downward adjustment from earlier expectations of 2.3 million and 2.9 million, respectively.

Contrasting these forecasts, Tesla China reported an impressive 15, 300 insured vehicles for the week ending March 16th, marking the company’s best weekly performance on record, despite concerns of a slowdown in the Chinese market. Further clarity on Tesla’s first-quarter deliveries is anticipated when the company releases its data in April.

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