Tesla Cut to ‘Hold’ by Baird Amid Robotaxi Concerns and ‘Key-Man’ Risk

Robert W. Baird analyst Ben Kallo downgraded Tesla (TSLA) stock to a “Hold” rating from “Buy” for the first time in three years. He also maintained his price target of $320, implying 3.7% downside potential from current levels. The long-time bull cited heightened expectations around the upcoming robotaxi launch event and uncertainty related to “key-man” risk surrounding CEO Elon Musk.

Additionally, Kallo noted that Tesla’s stock price has already priced in the hype of a “more affordable” electric vehicle and robotaxi service, suggesting limited upside in the short term. Despite these concerns, Kallo maintains a core long-term holding on TSLA.

Tesla stock is trending higher, up 3% in pre-market trading at the time of writing. The upswing comes as tensions between Musk and President Donald Trump seem to have faded. The two signaled mutual support through indirect means yesterday, with Trump confirming that his newly bought Tesla and Starlink internet services will remain in the White House. Meanwhile, Musk expressed support for the president’s strict immigration stance and rebuked the recent attacks on Waymo autos in Los Angeles.

Here’s Why Baird Downgraded Tesla

Kallo highlighted that TSLA stock has gained over 20% since its Q1 results, driven primarily by excitement surrounding the robotaxi service in Austin, Texas. Having said that, the analyst believes that the projected ramp-up rate for the robotaxi service appears “a bit too optimistic.” Additionally, Musk’s ties to Trump add a layer of uncertainty to the company’s future.

Meanwhile, on June 9, Tesla was added as a “known” autonomous vehicle (AV) operator in Austin, according to the Austin Department of Motor Vehicles website. The company is listed under the “testing” phase of autonomous driving services in the city, while rival Alphabet’s (GOOGL) Waymo is in the “deployment” phase. The success or failure of Tesla’s robotaxi launch could trigger significant moves in its stock. Moreover, factors such as increased competition, changes to vehicle delivery estimates, and gradual removal of the EV tax credits have contributed to Kallo’s decision to downgrade the stock.

Is Tesla a Good Company to Invest In?

On TipRanks, TSLA stock has a Hold consensus rating based on 14 Buys, 12 Holds, and nine Sell ratings. Also, the average Tesla price target of $285.97 implies 7.3% downside potential from current levels. Year-to-date, TSLA stock has lost 23.6%.

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