Caution on Tesla Amid Record Sales & Regulatory Concerns

24 days ago

Alex Semenova

"The company reported a surprise record quarter of vehicle sales as US consumers picked up their electric car purchases... investors still have major questions regarding the earnings impact of legislative changes choking off some of the regulatory stimulus that was helping Tesla a lot. And also, Wall Street is still expecting that Tesla will log its second consecutive vehicle sales decline."

Tesla delivered record vehicle sales with a 7.4% year-over-year increase, driven by strong demand before the expiration of a $7,500 tax credit, especially for the Model Y and Model 3. However, despite the strong sales numbers, the stock is down 4% and faces headwinds from potential legislative changes that could curb future earnings growth. Additionally, CFRA has highlighted that the risk/reward profile is unfavorable given the rapid 100% rally since April.

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