Swiss bank UBS (UBS) has reiterated its Sell rating on Tesla (TSLA) stock as tax credits on electric vehicles sold in the U.S. expire.
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UBS stuck with its Sell rating on TSLA stock a day after the electric vehicle maker reported third-quarter deliveries that were much better than Wall Street had expected. Analysts at UBS weren’t swayed by the strong Q3 deliveries.
Instead, UBS is focused on the EV tax credit in the U.S. that expired on Sept. 30 of this year. The Trump administration has ended the $7,500 tax credit for new electric vehicles sold in America and the $4,000 tax credit for used EVs, leaving the U.S. automotive industry scrambling.
Pull Forward
In a note to clients, UBS argued that much of Tesla’s Q3 deliveries, which are an approximation for sales, were due to pulled forward demand as consumers scrambled to buy an electric vehicle before the tax credits expired at the end of September.
UBS notes that Tesla’s sales continue to slump outside the U.S., falling by as much as 50% in some regions such as Europe. The Swiss bank also says that investors may continue to sell TSLA stock now that the electric vehicle tax credit in the U.S. has gone away. TSLA stock is up 6% this year.
Is TSLA Stock a Buy?
Tesla’s stock has a consensus Hold rating among 35 Wall Street analysts. That rating is based on 15 Buy, 12 Hold, and eight Sell recommendations issued in the last three months. The average TSLA price target of $346.57 implies 24.57% downside from current levels.
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