Tesla's Brand Appeal Drops 18% Globally, UBS Cuts Target Price 47%

UBS has issued a bearish outlook on Tesla, maintaining its "sell" rating on the company and setting a target price of $190, which represents a potential 47% drop from the stock's closing price on May 28. This downgrade is based on a survey conducted by UBS, which indicated that CEO Elon Musk's political involvement has negatively impacted Tesla's brand image in major global markets, leading to a decrease in consumer appeal.

The survey, which involved 10,500 participants, revealed that the proportion of electric vehicle buyers who considered Tesla their first choice decreased from 22% in 2023 to 18% globally. In the United States, this proportion dropped from 38% to 29%; in Europe, it fell from 20% to 15%; and in China, it declined from 18% to 14%. UBS attributed this decline to intense competition in China, where Tesla is no longer seen as a technology leader, and to the potential damage caused by Musk's political involvement in Europe.

UBS also noted that Tesla's product performance and brand recognition in the Chinese market have been surpassed by BYD, while Xiaomi has quickly eroded Tesla's market share. However, the report did not disclose the specific market share data for BYD and Xiaomi. According to data from CnEVPost, Tesla's delivery volume in China decreased by 31.6% in the first three months of this year compared to the fourth quarter of last year, totaling 134,607 vehicles.

Independent analyst Gao Shen commented that domestic automakers in China can produce more intelligent vehicles at a lower cost than Tesla's Model 3 and Model Y. The rise of local brands has significantly diverted purchasing interest away from Tesla. In Europe, Tesla also faces fierce competition from BYD. According to data from JATO Dynamics, BYD surpassed Tesla in Europe last month, becoming the leader in pure electric vehicle sales—4,231 pure electric vehicles were sold in Europe in April, a year-on-year increase of 169%; during the same period, Tesla's sales decreased by 49% year-on-year, totaling 7,165 vehicles.