Tesla shares fall 5% after HSBC initiates coverage, says sell

Tesla Shares closed down about 5% at $209.98 on Thursday after HSBC Global initiated coverage with a “downgraded” rating and a $146 price target. In their note, HSBC analysts called Elon Musk both an asset and a risk for Tesla, noting that he is a “charismatic CEO with a cult-like following” who “contributes to the innovator story.”

The analysts also pointed to the “hope” already baked into Tesla’s stock price around the company’s many ambitious future technology projects, from long-delayed self-driving systems to humanoid robots and supercomputers. “It is likely that the ideas need to materialize to support the current share price,” the analysts said.

“Tesla is more than just a very expensive car company,” the analysts wrote at the start of the note. “The ambition is to be an innovator, which supports the valuation.”

On the bearish side, HSBC analysts wrote: “Significant delays or developments indicating a lack of technological and/or regulatory feasibility for a commercial launch of these projects pose significant risk to Tesla.”

On the more optimistic side, HSBC analysts said Tesla’s core automotive business “faces fewer challenges than incumbents and as such deserves a premium.” They said: “EVs, thanks to rising penetration, are a growth market and are likely to remain so for decades to come. Tesla is already the leader in terms of costs and, given its stated ambitions (and size), this will probably remain the case.”

Also on the bullish side for TeslaThey said, “faster-than-expected development” in these areas “could lead to a revaluation of Tesla multiples,” as well as “higher-than-expected market share gains from the price reductions we expect” in Tesla’s core business of electric vehicles. .

In addition to HSBC’s ‘reduce’ rating, Tesla is also facing a broader strike in Sweden.

Swedish unions are pressuring Tesla with strikes and blockades over the company’s refusal so far to sign a collective bargaining agreement with service division employees, including technicians and mechanics who repair and maintain customers’ cars.

The IF Metall union, which represents a number of Tesla service workers, began strike action at 12 Tesla service centers on October 27, The New York Times reported. Port workers who are members of the Swedish Transport Workers’ Union have said they will not unload Teslas at ports in the region if the EV manufacturer fails to negotiate a labor contract by November 17. Electricians who maintain the company’s charging stations, among other things, have also promised to strike from November 17 if no agreement is reached.

According to reports from The New Republic, the workers’ action could possibly spread to Norway.

Meanwhile, President Joe Biden spoke to UAW workers in Illinois on Thursday, where he expressed support for the union leader’s ambition to reach collective agreements with Tesla, Toyota and others.

UAW President Shawn Fain said in an online broadcast in October, “When we return to the negotiating table in 2028, it won’t just be with the ‘Big Three,’ it will be with the Big Five or the Big Six.”

Tesla is expected to host a Cybertruck event at the end of this month. While specs and pricing for the final version of the Cybertruck have yet to be revealed, Tesla has allowed some Cybertrucks to be driven around to promotional events. Car critics, including hobbyists and professionals, this week scrutinized their build quality and design, The Autopian reported.