JP Morgan has reiterated its bearish call on Tesla, maintaining an “Underweight” rating and a $145 price target that implies a roughly 60% decline from current levels. Analyst Ryan Brinkman warned investors to approach TSLA shares “with a high degree of caution,” pointing to weak Q1 deliveries, a record pile-up of unsold cars, and intensifying competition—particularly from Chinese rivals like BYD, which overtook Tesla as the world’s top EV seller last year.Tesla delivered around 358,000 vehicles in the first quarter of 2026, falling 4% short of Wall Street consensus and 7% below JP Morgan’s own forecast. More troubling: the company produced over 50,000 more cars than it sold during the quarter—the largest inventory build in its history.
Tesla’s unsold inventory hits a record as price cuts fail to move metal
That growing stockpile of unsold vehicles is the centrepiece of JP Morgan’s concern. Brinkman noted that Tesla’s aggressive price-cutting strategy appears to be losing its punch. Further discounts could squeeze automotive gross margins through the rest of the year, and the free cash flow picture looks grim—analysts once projected $35.7 billion in FCF for 2026; the current forecast is a nearly $5 billion outflow.The numbers tell a stark story of demand erosion. Tesla’s Q1 deliveries came in 74% below the 1.36 million units analysts had projected for this period back in mid-2022. Production has climbed 80% since early 2023, but the company is actually selling 15% fewer cars over the same stretch.
China’s BYD and a crowded EV field keep squeezing Tesla’s core business
Chinese competitors continue to be the biggest thorn. BYD’s relentless expansion across international markets has chipped away at Tesla’s dominance, and a broader wave of affordable Chinese EVs is making it harder for Tesla to hold ground even in its home turf. The global EV subsidy environment has also cooled, removing a tailwind Tesla once relied on.Meanwhile, Tesla’s energy storage division—once pitched as a reliable hedge against automotive cyclicality—posted a 15% year-over-year decline in installations, missing consensus by nearly 40%. JP Morgan slashed its full-year 2026 EPS estimate from $2.00 to $1.80, below consensus.
Musk’s pivot to robotaxis and robots faces execution risk—and scepticism
Tesla is banking on a pivot toward robotaxis, autonomous driving software, and humanoid robots to justify its $1.3 trillion valuation. But Brinkman flagged “above-average execution risk” in these unproven segments, noting that Alphabet’s Waymo already operates robotaxis at scale and that the robotics field is crowded with players from Apptronik to China’s Unitree.JP Morgan isn’t alone. HSBC also expects a 60% decline, while GLJ Research’s Gordon Johnson has called Tesla “the single greatest stock short in market history,” with a $25 target. Tesla trades at roughly 212 times trailing earnings—against a sector median of 15x.