William Blair downgrades Tesla on headwinds from Big Beautiful Bill

William Blair downgraded Tesla (TSLA) to Market Perform from Outperform without a price target The stock in premarket trading is down 7%, or $21.50, to $293.85. While the Big Beautiful Bill’s removal of the $7,500 electric vehicle tax credit was expected, the elimination of the corporate average fuel economy fines “requires a reset in expectations,” the analyst tells investors in a research note. William Blair believes the combination of a demand headwind from the tax credit removal and Tesla’s over $2B in profit from regulatory credits being at risk “may be too much for investors to bear.” The firm expects the company’s reduction in regulatory credit revenue to result in a “direct hit to profitability, prompting yet another across-the-board reset to Street models.”