The Guggenheim analyst has downgraded Tesla's stock to a sell rating.

Tesla's stock has struggled recently, with sales declining in multiple regions, particularly in Europe. Elon Musk's relationship with the Trump administration has also contributed to his controversial image, leading to a 27% decline in the stock so far this year. Despite the impending launch of Tesla's driving assistance feature in China, which is similar to full self-driving (FSD), Guggenheim analysts are bearish, saying that pricing FSD in China will be a challenge, and competition in the Chinese market is becoming more intense, with competitors such as BYD and Li Auto's navigation assistance (NOA) features becoming standard, and the ability to charge for advanced driving assistance systems (ADAS) features is declining. While the launch of FSD in China could help boost Tesla's sales and future-proof its products, the analyst says that the potential for deferred revenue recognition, even with low adoption rates, is noteworthy, given that Tesla has more than 2 million vehicles in China. However, this is not enough to change the bearish stance. The analyst rates Tesla's stock as sell, with a target price of $175, which implies a decline of about 40% from current levels.