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EV bulls like Cathie Wood of ARK Invest and Dan Ives of Wedbush Securities this week recalled the death of the EV transformation and Tesla (NASDAQ:TSLA) the story has been scripted many times before. The defenses it came with some bearish analysts taking a victory lap over this year’s sluggish stock price and the disappointing outlook provided by the company along with its fourth-quarter earnings report.
“Tesla is going through a cycle-related low,” Wood told CNBC. “But when autonomous taxi networks and platforms come online, as we think they will within the next couple of years… then what we’re talking about with Tesla will be a reacceleration of growth and a huge increase in margins,” he added.
Meanwhile, Ives has criticized Elon Musk a few times in recent weeks, but thinks skeptics are wrong to assume that electric vehicles are a fad. “We couldn’t disagree more with Tesla’s ultra-negative narrative that is building and forming a dark cloud over the stock,” she wrote. “While the next few months are clearly a bit cloudy for the Tesla story and overall electric vehicle demand, long-term our view is that by the end of the decade about 20% of cars will be self-driving EVs and the FSD will be a reality and not a dream.” /aspiration,” he predicted. Key near-term questions for TSLA investors include the outlook for margins after price cuts in several markets and what leverage the Tesla (TSLA) board will use to restore investor confidence amid uncertainty whether Elon Musk will do something drastic with the artificial intelligence business if he doesn’t gain 25% voting control.
Ives lashes out: “The stock is cooking a tremendous amount of bad news in our view and the onus is now on the Board to outline a strategy that investors can see as the basis for Tesla’s future with Musk its heart and lungs of this vision” We believe the uncertainty around Musk in Tesla and overall AI initiatives has resulted in a $40-$50 per share excess on the stock that needs to be addressed by the Board.
Wall Street overall is cautious on Tesla (TSLA) with 16 Buy-equivalent ratings compared to 22 Hold-equivalent ratings and 7 Sell-equivalent ratings. Analysts also disagree on the impact of Tesla (TSLA) introducing a sub-$30,000 mass-market vehicle (transformative effect vs. negative Osbourne effect). Amid the debate, the average price target from sell-side analysts on TSLA implies only a 10.5% share price gain over the next year. 
Analysts at Seeking Alpha also have mixed opinions, with 16 Buy-equivalent ratings not that far from the 13 Hold-equivalent ratings and 13 Sell-equivalent ratings.
Tesla (TSLA) is down about 22% year over year and is trading below one-year-ago and two-year-ago levels. However, the monstrous 2020-2022 rally is still embedded in Tesla’s (TSLA) market cap of $614 billion, and the company is the 12th most valuable in the US based on market cap. The next three pure-play EV stocks on the market cap list are BYD Company (OTCPK:BYDDF) at $71.6 billion, Li Auto (LI) at $25.3 billion, and Rivian Automotive ( RIVN) at $16.0 billion.