Tesla Shares Decline Amid Downgrade and Delivery Drop

Tesla Inc. shares fell following a downgrade from Bank of America, which shifted its rating from 'Buy' to 'Neutral' and set a price target of $490, citing high execution risks and regulatory uncertainties. The downgrade, combined with an investigation by the U.S. National Highway Traffic Safety Administration into the safety of the 'Smart Summon' feature, contributed to a 1.8% decline in early trading. Additionally, Tesla reported a significant drop in sales in China, with only 5,500 vehicles sold in the first week of 2025 compared to 18,600 the previous week, placing them sixth in the luxury car market. The company also faced a 1.1% decline in global deliveries for 2024, marking its first annual drop. Growing competition from manufacturers like BYD and traditional automakers such as Ford and General Motors is further challenging Tesla's market position. Analysts remain divided, with some expressing optimism about long-term growth potential despite these immediate setbacks.