Why a Wall Street Analyst Warns Tesla Shares Could Drop 60%

A prominent Wall Street analyst, Gordon Johnson of GLJ Research, has issued a stark warning that Tesla shares could plummet by 60% from current levels. This bearish outlook is driven by increasing concerns over weakening sales performance, shrinking profit margins, and record-high inventory levels accumulated by the electric vehicle giant. The underlying reasons for this potential decline are multifaceted. Firstly, the global electric vehicle (EV) market is facing intense competition, particularly from Chinese manufacturers like BYD, leading to a fierce 'price war' that erodes Tesla traditionally strong 'gross margins' and 'profits'. Secondly, 'softening consumer demand', exacerbated by persistently high 'interest rates' and a broader 'economic slowdown', is making high-ticket purchases like EVs less attractive to consumers, contributing to the swelling 'inventory levels' at Tesla factories and dealerships. Investors are also scrutinizing the ambitious timeline for Tesla 'Full Self-Driving (FSD)' technology, which has yet to fully materialize as a significant revenue driver.