Tesla Inc. shares tumbled nearly 4% on Tuesday, extending a rough start to the year for the electric vehicle (EV) giant. The decline came after fresh reports revealed a planned production halt at the company’s Austin Gigafactory, heightening investor unease ahead of Tesla’s much-anticipated Robotaxi launch.
Production Halt Hits Cybertruck and Model Y Lines
According to Business Insider, Tesla will suspend manufacturing of its Cybertruck and Model Y models for one week starting June 30. The temporary halt is reportedly intended to perform maintenance and upgrades on its production lines. However, the company has yet to provide specifics regarding potential output improvements or how the downtime will affect Q2 delivery targets.
This will mark at least the third production pause at Tesla facilities this year, a worrisome trend for investors watching the company struggle with demand headwinds and intensifying global competition. Tesla’s stock has now slumped roughly 22% year-to-date.
Investor Sentiment Wavers Amid Growing Concerns
The production stoppage comes on the heels of a challenging Q1 marked by weaker-than-expected earnings and delivery figures. Analysts also point to ongoing market risks, from the growing strength of Chinese EV players to internal leadership distractions.
Tesla CEO Elon Musk’s increasingly public political stances and online controversies have added another layer of volatility to the stock, raising questions about brand perception and focus on core business objectives.
Robotaxi Rollout Looms Despite Opposition
In these production woes, Tesla is gearing up to launch a pilot version of its long-awaited Robotaxi service in Austin on June 22. The initiative will deploy Model Y vehicles equipped with the company’s latest Full Self-Driving (FSD) software to offer autonomous rides across the city.
However, the project is not without controversy. Local groups and transportation advocates have voiced concerns over safety and regulatory transparency, with some calling for greater public oversight of the Robotaxi program. Despite these objections, Tesla remains determined to push forward, betting heavily on autonomous driving as a future growth engine.
Analysts Lower Targets; Free Cash Flow Pressures Mount
Wall Street is taking a more cautious view of Tesla’s near-term prospects. In a new report, Wells Fargo analyst Colin Langan issued a bearish forecast for Q2, warning that Tesla would need to boost June deliveries by over 50% to hit consensus targets.
Langan also projected a $1.9 billion free cash flow deficit for the full year and cut his 12-month price target on Tesla stock to $120, implying a potential 62% downside from current levels.
Is TSLA Stock Still a Buy?
Market sentiment around TSLA remains deeply divided. Among 43 Wall Street analysts, the average one-year target price for Tesla shares currently stands at $289.30, approximately 8.5% below its recent trading level of $316.35. Targets range widely from $19.05 on the low end to an optimistic $500.
Meanwhile, GuruFocus estimates suggest Tesla’s “fair value” is closer to $269.36, indicating a possible 14.85% downside from today’s price.
With a murky macro backdrop, fierce competition, operational hurdles, and mounting skepticism around its autonomous driving promises, Tesla faces an uphill climb to restore investor confidence in the second half of 2025.
