Shares of electric vehicle maker Tesla (TSLA) gained over 1% during early trading on Wednesday despite its sales slump in Europe and China in October. This is even as the team at Mizuho (MFG) has warned on the impact of subsidy cuts on Tesla’s expected deliveries in 2026 and 2027.
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Tesla Faces Sales Slump
Already, new data indicated that Tesla’s new EV registrations across the European Economic Area, the UK, and Switzerland plunged by 48.5% year-over-year in October, even as its China sales hit a three-year low. This comes as Chinese automakers continue to flood the market with various EV models, with brands such as BYD (BYDDY) and Nio (NIO) expanding their market share.
In addition to weaker sales in China and the EU, delivery numbers also fell in October in the U.S. — the EV producer’s largest market — and South Korea, one of its four top markets.
Analyst Warns on Impact of Subsidy
Reacting to the update, Mizuho Securities analyst Vijay Rakesh warned of a hit to Tesla’s EV deliveries in the U.S. due to the end of the American government’s subsidy for EV purchases. The five-star analyst also expects a potential 50% EV subsidy slash by the Chinese government in 2026 to impact the carmaker’s deliveries in that year.
As a result, Rakesh sees Tesla deliveries coming in at an estimated 1.75 million in 2026 and 2 million in the subsequent year. His predictions are below Wall Street’s consensus projections of 1.82 million and 2.15 million for both years.
Despite arguing that Tesla’s recent release of the latest version of its Full Self-Driving technology for its robotaxi and humanoid robots will provide some momentum for Tesla into 2027, the analyst trimmed his price target by 2% from $485 to $475. Yet, the price target implies more than 13% upside from the current trading levels.
Is Tesla Stock a Buy or Sell?
Across Wall Street, analysts remain cautious on TSLA stock. Tesla’s shares currently have a Hold consensus rating based on 14 Buys, 10 Holds, and 10 Sells issued by 34 analysts over the past three months.
Moreover, at $383.04, the average TSLA price target suggests almost 9% downside risk.
