Tesla Shares Downgraded On 'Macro Challenges': How The Collapse Of SVB Financial Could Impact EV Leader

An analyst is downgrading shares of electric vehicle leader Tesla Inc TSLA, and the fallout from the collapse of several banks is one reason why.

The Tesla Analyst: Wolfe Research analyst Rod Lache downgraded shares of Tesla from Outperform to Peer Perform and maintained a $185 price target.

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The Tesla Takeaways: Lache downgraded shares of Tesla on macroeconomic concerns and the fallout from collapsed banks like SVB Financial SIVB, owner of Silicon Valley Bank.

The downgrade comes after Wolfe Research highlighted the strong progress the company had made on costs and demand in a September 2022 upgrade.

“We’re still convinced of Tesla’s improved cost trajectory, which should propel impressive growth over time,” Lache said. “However, we’ve also become incrementally more concerned about macro challenges."

Tesla cut prices on its vehicles more than expected, the analyst said. 

Lache also points to a potential implosion of the tech sector and tightened credit due to the collapse of SVB Financial.

The analyst said that California made up around one-third of U.S. electric vehicle sales in 2022, including around 41% of Tesla’s U.S. sales.

“We believe there’s risk that tech spending will slow down even faster, and there will be large layoffs.”

Lache said that cars could be one of the areas where consumers limit their spending.

“Autos are durable goods, and their purchases are deferred when consumers feel less financially secure.”

The analyst said things could get worse if sentiment takes another hit.

TSLA Price Action: Tesla shares are up 1.37% to $175.82 on Monday versus a 52-week range of $101.81 to $384.15.

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Photo courtesy of Tesla.