Extremely bearish! “Xiao Mo” predicts that Tesla’s stock price will crash by 60% by the end of the year—what’s the reason?

Jiemian News (April 7, edited by Bian Chun): Tesla’s stock price has fallen 20% this year, making it the worst-performing company among the U.S. “Magnificent Seven.” Morgan Chase issued its latest warning to Tesla investors in recent days, urging the latter to prepare for further downside in the road ahead.

Tesla’s start in April was poor, with its first-quarter delivery report disappointing. In that quarter, this electric vehicle company sold only 358,000 vehicles, which was 4% lower than analysts’ expectations and 7% below Morgan Chase’s forecast of 385,000 vehicles.

Although Tesla’s Q1 deliveries grew 6.3% year over year, that growth was achieved on a lower base from the same period last year, and there was a significant quarter-over-quarter decline compared with last quarter’s record delivery volume.

These delivery figures led Morgan Chase analyst Ryan Brinkman to reiterate a “sell/underperform” rating for Tesla and set a year-end target price of $145, nearly 60% lower than the level on Monday.

Record high stagnant inventory is the core basis for Morgan Chase’s bearish view of Tesla.

The firm wrote in a research note: “New vehicle inventory that hasn’t been sold has surged, further exacerbating Tesla’s free cash flow predicament. In Q1 2026, Tesla’s production exceeds deliveries by 50,363 units, and the single-quarter inventory overhang hits a new historical high.”

Brinkman pointed out that since Q1 2023, Tesla’s production has grown by 80%, yet during the same period car sales have fallen by 15%.

He also noted that Tesla’s delivery volumes topped out as early as early June 2022, but since then the stock price has risen by about 50%. The stock price is severely misaligned with fundamentals, suggesting that Wall Street is pricing in some narrative that hasn’t played out yet: as Tesla’s vehicle sales continue to slide, investors are betting on hopes for projects such as automated driving taxi services and humanoid robots.

Morgan Chase believes investors should remain cautious about Tesla’s stock price.

At the moment, Tesla is facing a range of “headwinds.” At the end of last year, the Trump administration canceled the $7,500 federal electric vehicle tax credit policy, dealing a heavy blow to demand for electric vehicles in the U.S. In addition, persistently high interest rates have also raised loan costs for car buyers.

Meanwhile, Tesla is facing major pressure from Chinese electric-vehicle competitors such as BYD, as well as traditional automakers like Mercedes-Benz, General Motors, and Ford.

It should be noted that Brinkman’s target price is somewhat unusual by Wall Street standards—the average target price from analysts for this stock is $360.

However, despite Morgan Chase being extremely bearish on Tesla, the firm isn’t the biggest short. Recently, HSBC analyst Michael Tyndall reiterated a “sell/underperform” rating on Tesla stock and set a 12-month target price of $131.

(Jiemian News, Bian Chun)