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  • Writer's pictureRealFacts Editorial Team

Tesla’s Autonomous Gamble: Investor Challenges Amid Core Business Struggles

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In CNBC’s article titled “Tesla Shares Expected to Drop 30% as Investors Question Musk’s Autonomous Vision, Says Guggenheim,” Samantha Subin cites analyst Ronald Jewsikow’s views. He emphasizes that Tesla’s future largely hinges on autonomy, a tricky proposition requiring investors to believe in a future that lacks solid proof while ignoring current problems in Tesla’s traditional car business. Should Elon Musk’s vision of an autonomous future fail to convince the market, Tesla investors could face significant obstacles, as pointed out in a recent analysis by Guggenheim. Tesla’s increasing reliance on the promise of autonomous vehicles demands investors to buy into a narrative that lacks strong empirical support while disregarding the ongoing challenges in its conventional car business, as noted by analyst Ronald Jewsikow. Despite the positive outlook on autonomy, Tesla’s struggles in its core business and competition in the electric vehicle market, especially from Chinese rivals, have led to a 29% drop in the stock this year.

Jewsikow remains cautious, maintaining his sell rating and setting a $126 price target for Tesla’s stock, indicating a potential 29% downside from current levels. His skepticism revolves around the optimistic forecasts for the robo-taxi sector and ambitious timelines for commercialization, which he considers overly hopeful. Jewsikow argues that expectations for autonomous vehicle economics are premature and lack sufficient real-world data to back them up. He highlights the significant uncertainty surrounding the achievement of large-scale operations within the next decade, warning that even a five-year delay could greatly reduce the value of such ventures.

Besides autonomy concerns, Jewsikow has adjusted his short-term outlook for Tesla’s performance, lowering his second-quarter delivery estimates from 440,000 to 409,000 units. This change reflects the lack of a clear path toward significant volume growth in 2024 and disappointing quarterly figures. The combination of fierce competition, particularly from Chinese rivals, and unfulfilled promises of future expansion presents a challenging scenario for Tesla investors, who may need to reassess their expectations amid these evolving market dynamics.


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