JP Morgan isn’t blinking. The bank has once again stood by its Underweight rating on Tesla, holding a $145 price target that implies a roughly 60% haircut from current levels. Analyst Ryan Brinkman’s message to investors is almost refreshingly blunt. Approach TSLA stock “with extreme caution”. That’s practically a standing ovation in reverse.
The numbers behind the warning aren’t subtle. Tesla delivered around 358,000 vehicles in Q1 2026, 4% below Wall Street consensus and 7% below JP Morgan’s own forecast. More telling is what didn’t get delivered. The company produced over 50,000 more cars than it sold during the quarter, the largest inventory buildup in its history. That’s a parking lot problem.
The aggressive price-cutting strategy that once looked like a masterstroke of market dominance is running out of road. Further discounts risk crushing automotive gross margins for the rest of the year, and the free cash flow picture has gone from optimistic to alarming. Analysts had penciled in $35.7 billion in free cash flow for 2026. The current estimate? A nearly $5 billion outflow.
Meanwhile, deliveries in Q1 came in 74% below the 1.36 million units analysts were projecting for this period back in mid-2022. Production has climbed 80% since early 2023, yet Tesla is actually selling 15% fewer cars over the same stretch.
Even Tesla’s energy storage division, once pitched as a reliable hedge against automotive cyclicality, has stumbled. Installations fell 15% year-over-year, missing forecasts by nearly 40%.
The robotaxi and humanoid robot pivot is now carrying the weight of Tesla’s $1.3 trillion valuation. Brinkman flags “above-average execution risk” in both segments. JP Morgan isn’t alone in its skepticism: HSBC projects a similar 60% decline, while GLJ Research’s Gordon Johnson has called Tesla “the single greatest stock to short in market history”, targeting $25 a share.
Tesla currently trades at around 212 times trailing twelve-month earnings. The sector median sits at 15 times. Somewhere between those two numbers lives a question that no robotaxi has answered yet.
