HSBC Cautiously Raises Tesla’s Price Target Amid Mixed Outlook

HSBC analysts increased Tesla (NASDAQ:TSLA) price target to $140 from $126 but maintained a Reduce rating, reflecting skepticism over the company’s near-term growth prospects and the viability of its ambitious projects. While Tesla’s innovative roadmap sparks intrigue, challenges around execution and timing continue to weigh on the analyst's outlook.

Tesla has already indicated that fourth-quarter margins are likely to soften compared to the strong performance in the third quarter. However, the potential for regulatory credits and Full Self-Driving (FSD) updates could offer some upside surprises. The Energy Storage Solutions (ESS) segment, which delivered solid results in the second quarter, might also provide intermittent support due to its unpredictable revenue pattern.

Key attention is likely to shift toward Tesla’s volume growth projections for 2025, which management has suggested could range from 20% to 30%. However, questions remain about whether this target is achievable. While Tesla has hinted at more affordable models, the lack of concrete updates such as certifications, spy shots, or industry confirmations suggests these may be variations of existing models rather than entirely new offerings. If so, their ability to meaningfully drive market share gains appears limited.

Longer-term initiatives, such as the Cybercab concept, face significant regulatory and commercialization hurdles, with approval unlikely before 2026. Similarly, Tesla’s other ambitious projects—ranging from FSD to robotics (Optimus) and AI Compute—are seen as exciting but with timelines and commercial viability that remain highly uncertain. The analysts noted that Tesla’s aggressive rhetoric often overshadows missed deadlines and targets, underscoring the disconnect between its valuation and realistic delivery timelines.