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Tesla’s weak customer value proposition is another area of concern. With falling gasoline prices, high electric vehicle (EV) prices, long charging times, and range anxiety, Tesla finds itself at a disadvantage. The company’s focus on the expensive Cybertruck rather than affordable EVs has contributed to its competitive struggles, especially against successful strategies employed by Chinese companies like BYD.
The Cybertruck, announced in November, has faced criticism for its design and features. Described as an “apocalypse-bunker-on-wheels” with an elevated body and a blunt front end resembling a battering ram, the Cybertruck’s approval for sale in Europe seems unlikely. The design features, coupled with a price tag of $60,990, 53% above the initially promised amount, have led to questions about Tesla’s decision-making.
While Tesla plans to introduce more affordable vehicles in the second half of 2025, Musk’s distraction with ventures like the acquisition of Twitter (now X) and the pursuit of a Generative AI rival to OpenAI has raised concerns. Musk’s desire to increase his stake in Tesla from 13% to 25% to turn the company into a leader in AI and robotics has left investors wondering about the future of the electric car company.
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Analysts have responded to Tesla’s challenges by revising their price targets, reflecting a lack of optimism about the company’s prospects. Barclays, RBC, and Canaccord Genuity have all reduced their price targets, citing uncertainties and downside risks for Tesla in the near future.
As Tesla grapples with internal challenges, external pressures, and the evolving landscape of the electric vehicle market, investors face a critical decision. With the stock down 25% in 2024, the question remains: Is it time to take profits and reconsider the long-term viability of Tesla’s growth story? Only time will tell how the electric car pioneer navigates these turbulent waters and whether investors will see a resurgence in confidence or a continued decline in value.
