Tesla TSLA shares slumped lower Thursday after analysts at HSBC initiated coverage of the clean-energy-car maker with a muted rating and a discounted price estimate, citing elevated investor optimism and challenging delivery targets.
HSBC analyst Michael Tyndall started the bank's coverage of Tesla with a 'reduce' rating and a target of $146 a share, implying a 34% decline from current levels, citing the group's goal of reaching 20 million deliveries by 2030 as the key medium-term challenge.
Tesla said last month that it's on pace to meet its 2023 goal of 1.8 million EVs, although CEO Elon Musk cautioned that an earlier ambition of growing overall deliveries by 50% each year may not be possible.
Tyndall also suggested that capital costs linked to many of Tesla's objectives beyond its core EV business — such as the licensing of full-self driving technologies, its Dojo supercomputer and the recently unveiled Optimus robot — "should be well above the group average given the regulatory and technological challenges they face."
Related: Tesla hits 5-month low, down 20% from Q3 earnings, amid fading EV demand
The bank also highlighted a key risk to Tesla under Musk, by some measures the world's richest man, given the level of influence he has on both its business fundamentals and its overall investor perception.
“Elon Musk’s global fame has afforded the group a customer awareness that far outweighs the money it has spent on marketing and advertising, which is therefore a tangible benefit to the [profit-and-loss]," Tyndall said.
"Leaving aside the current legal issues Elon Musk faces, we think his prominence presents a considerable 'singleman' risk at the group."
Tesla shares were marked 6.1% lower in late afternoon trading to change hands at $208.46 each, a move that would still leave the stock with a 23% gain for the past six months.
Short interest in Tesla stock, however, remains elevated at the highest levels in the world, with investors placing bets against the group of around $18.63 billion, or 3.03% of the stock's entire float, according to data from S3 partners.
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