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Tesla (TSLA) has reportedly reduced its monthly lease fee to stimulate demand in the United Kindom. Shares of the electric vehicle behemoth are still pushing to the upside on Monday.
According to The Times, the automaker had to offer up to 40% discounts to the nation’s car leasing companies to prevent losing further market share in the region.
Despite rising competition and demand-related concerns, however, Tesla stock has been a lucrative investment over the past four months. At writing, it’s up roughly 50% versus its April low.
Why Discounts Are Bad for Tesla Stock
The aforementioned lease discounts report bodes poorly for TSLA stock because it reiterates the company is struggling to maintain its market share and attract demand in the competitive European market.
A desperate move to offer aggressive discounts may erode margins and undermine pricing power, which are broadly seen as key pillars of Tesla’s premium brand image.
In fact, if demand continues to weaken further, the long-term profitability and sustainable growth of the electric vehicle manufacturer could be brought into question.
In short, The Times report reflects broader challenges in EV adoption or intensifying competition from local automakers, which may eventually make investors question how well Tesla shares are really positioned in the global EV space.
Robotaxis May Not Save TSLA Shares
While the bullish sentiment surrounding TSLA shares now hinges mostly on the firm’s artificial intelligence (AI) and robotaxi initiatives, Barclays analysts warn they might not do much for the EV stock in the near term.
Barclays maintains its “Neutral” rating on Tesla stock for the back half of 2025, with its $275 price target indicating potential downside of more than 17% from current levels.
According to the investment firm, the EV maker has engaged state regulators, but discussions have been “more limited than people realize,” at least so far.
Wall Street Rates Tesla at ‘Hold’ Only
Other Wall Street firms also agree with Barclays’ cautious stance on Tesla stock.
The consensus rating on TSLA shares currently sits at “Hold” with the mean target of roughly $300 indicating potential downside of over 10% from here.
