Tesla gains could be limited as competition mounts, according to RBC Capital Markets. Analyst Tom Narayan lowered his price target to $320 per share from $440 on the electric vehicle maker. However, this new forecast still represents potential upside of 34%. Narayan also kept his outperform rating on shares. Driving the lower price target is lowered expectations around pricing for the company's self-driving capabilities. "We now assume Tesla FSD pricing drops to $50/month in 2026 from $100/mo today," he said. Tesla is also facing pressure from overseas rivals, particularly in China. "While we do think it unwise to extrapolate too much from car demand dynamics, Tesla is losing market share in Europe and China," the analyst wrote. "In China in particular, competition is intensifying. Further, on robotaxis, we think it likely that domestic OEMs [original equipment manufacturers] will dominate the market. As a result, we now lower our market share assumption to 10% from 20% in both markets." TSLA 1Y mountain TSLA 1Y chart However, Narayan reiterated his overall bullish sentiment on Tesla stock and stated that delivery fears for the company may be "overblown." "Although sales fell sharply in Europe (45% in January) and China (60% in January and 21% in February), these regions represent a small portion of Tesla's total sales compared to their annual figures (311k in Europe and 683k in China for '24). Tesla's U.S. sales, on the other hand, saw modest increases," he wrote. Tesla has been volatile in recent months, with shares this year dropping 41%. Concerns around CEO Elon Musk's growing political profile, as well as concerns around sales, have hurt shares in 2025. Narayan isn't the only analyst to lower their price target on Tesla this week. Mizuho cut its forecast on the stock to $430 from $515 earlier in the week, citing softer sales of electric vehicles. Analyst sentiment around the stock is mixed. Of the 54 who cover Tesla, 26 rate it a buy or strong buy, according to LSEG. Another 16 have a hold rating on it, while 12 more have an underperform or sell rating.
