“Given EV product moves by GM, VW Group, Ford and Hyundai, we anticipate Tesla’s lead to narrow from here on,” said UBS analyst Patrick Hummel.

Tesla shares went lower on Tuesday after UBS analysts dropped their price target on the carmaker, citing growing competition from U.S. and European rivals and a lower lead in EV sales from Chinese buyers.

UBS analyst Patrick Hummel did keep his ‘neutral’ rating on Tesla, but decreased his price target by $70, down to $660 a share, before the company’s highly-anticipated Q2 delivery numbers due out later this week.

UBS wants to see a Q2 delivery number of 195,000, including mostly Model 3 and Y products with 5,000 S and X also, but stressed that “the demand issue in China is a concern, with local EV companies rapidly getting share.”

“German premium incumbents Mercedes, Audi, and BMW are still wanted vs. Tesla in face-to-face competition,” Hummel stated. “Given the moves by GM, VW Group, Ford and Hyundai, we believe Tesla’s lead will shrink from here on.”

“In China, their lead still exists but with a slightly negative year-on-year decline while local EV carmakers going up in the ranking,” he said.

Tesla shares were around 0.6% lower in trading on Tuesday to be sold at $685.50 each.

CEO and founder Elon Musk hinted at a possible 800,000 2021 delivery target previously this year after the company posted a record 499,950 for 2020, before also having a record Q1 total of 184,800 and revenues reaching $10.4 billion.

Increasing China demand, however, make take Tesla’s Q2 total over 200,000 when the numbers are published later on this week, with data from the nation’s Passenger Car Association revealing massive gains from the pandemic base and a run-rate of nearly 92,000 deliveries for the three month period which ended in June.

Author: Blake Ambrose

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