Goldman Sachs analysts have tempered enthusiasm surrounding Tesla’s stock performance following Monday’s rally, emphasizing the obstacles the company faces in achieving full self-driving technology in China.
Despite Tesla shares climbing more than 15% on Monday after securing regulatory approval for its advanced driver-assistance system in China, Goldman analyst Mark Delaney maintains a $175 price target, indicating a potential 9.8% downside from the stock’s recent closing price.
Delaney acknowledges that Tesla’s engineering advancements have global applicability but stresses the necessity for localized enhancements to satisfy Chinese regulatory requirements. He also cautions that Tesla must navigate government regulations regarding data access, localization, and artificial intelligence, which could hinder technology sharing within and outside of China.
The pace of Tesla’s driver-assistance technology updates is seen as a key factor in determining its impact on the company’s business in China. However, Delaney emphasizes that the technology is not yet an “eyes-off/unsupervised product,” implying that Tesla has significant work ahead.
As of Tuesday’s opening, Tesla shares fell by over 3%. Despite the recent rally, the stock remains down almost 22% in 2024 due to ongoing sales challenges.
