Morgan Stanley analyst Adam Jonas said Tesla appears to have met his "very high" expectations with the technical capabilities of its newly launched Model X SUV, but also notes that the new vehicle has an average transaction price that is "easily" $10,000 to $15,000 higher than he'd expected. Citing the higher than expected price, Jonas now thinks the Model X may struggle to meet consensus volume expectations and he cut his Model X forecasts by between 5,000 and 10,000 units annually from 2016-2018. The analyst also trimmed his Model S annual volume forecasts from 2016-2018 by 2,000-3,000 units to account for some cannibalization and expectations for slightly slower volume uptake in China. Jonas lowered his price target on Tesla shares to $450 from $465 but maintains an Overweight rating on the stock.

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Deutsche Bank analyst Emmanuel Rosner downgraded Tesla to Hold from Buy with a price target of $123, down from $189. The analyst cites the "high likelihood" of Model 2 push-out and the company's change of strategic priority to Robotaxi for the downgrade. Deutsche's Buy rating was predicated on Tesla's next-generation vehicle priced at $25,000 coming late next year, which would allow the company to reaccelerate volume, margins and free cash flow, and potentially come to dominate the Western electric vehicle market, the analyst tells investors in a research note. However, pushing out the Model 2 will create "significant" earnings and free cash flow pressure on 2026 and beyond estimates, and make the future of the company tied to Tesla "cracking the code on full driverless autonomy," which represents a "significant technological, regulatory and operational challenge," says Deutsche Bank. The firm views Tesla's shift to Robotaxi as "thesis-changing," and worries the stock will need to undergo a "potentially painful transition in ownership base," with investors previously focused on electric vehicle volumes and cost advantages potentially "throwing in the towel, and eventually replaced by AI/tech investors with considerably longer time horizon."

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