Wells Fargo Predicts 61% Drop in Tesla Stock Despite Robotaxi Launch

Wells Fargo has issued a notably bearish price target for Tesla (TSLA) despite the highly-anticipated launch of the company's robotaxi service. The banking giant expects a significant drop in Tesla’s stock price, citing concerns about the weakening core auto business and aggressive financing promotions that act as price cuts. Wells Fargo's analyst, Colin Langan, notes that while order pricing on Tesla’s website appears stable over the past 12 months, the risk to the second quarter margin remains due to lower leverage.

Wells Fargo has given Tesla an underweight rating and set a price target of $120, suggesting a potential 61% drop from the stock's closing price of $308.58. This bearish forecast comes despite investor excitement surrounding Tesla’s robotaxi launch, which is set to provide on-demand transportation without human drivers. Langan believes that potential tailwinds, such as Tesla’s work on autonomous driving, are not sufficient to offset the weak automotive numbers.

Tesla’s global deliveries have decreased by 23% year over year, largely due to increased competition in China. The stock has already declined by more than 22% in 2025, with a nearly 10% slump in June alone. Langan doubts that the limited debut of the robotaxi service will be enough to overshadow the poor fundamentals of the company. The analyst's concerns highlight the challenges Tesla faces in maintaining its market position amidst intense competition and regulatory hurdles.

Wells Fargo's cautious outlook suggests that the firm may have reservations about the execution and market acceptance of Tesla's robotaxi service. The competitive landscape in the autonomous vehicle sector is intense, with several companies investing heavily in this technology. This competition could make it difficult for Tesla to achieve a dominant market share, despite its early mover advantage. Additionally, regulatory hurdles and safety concerns surrounding autonomous vehicles pose significant challenges for Tesla. The successful deployment of a robotaxi service would require navigating complex regulatory frameworks and ensuring passenger safety, which could be a lengthy and costly process.

Tesla's financial performance and operational efficiency will also play a crucial role in determining the success of the robotaxi service. The company has faced challenges in scaling its production and maintaining profitability, which could impact its ability to invest in and deploy the new technology effectively. Wells Fargo's bearish target may reflect concerns about Tesla's financial health and its capacity to execute on its ambitious plans. Investors will be closely monitoring Tesla's progress in this area and how the company navigates these potential obstacles.