Investing.com -- Mizuho analysts cut their price targets on Tesla (NASDAQ:TSLA) and Rivian (NASDAQ:RIVN) shares, attributing the revision to uncertainties around tariffs and regulatory changes that could impact the electric vehicle (EV) market.
The investment bank lowered the target for Tesla stock to $430 from $515 and for Rivian stock to $11 from $13.
The analysts point to potential challenges including the possibility of higher tariffs on autos and auto parts from Mexico that are not compliant with the United States-Mexico-Canada Agreement (USMCA), and loosened CO2 emission targets in the European Union.
They highlighted that approximately 8% of autos and 20% of auto parts from Mexico could face a tariff increase from 2.5% to 20%. This could lead to higher average transaction prices (ATPs) for U.S. consumers and impact demand if the tariffs are implemented on April 2nd.
Mizuho also noted a shift in the EU's regulatory stance, which could reduce the need to meet 2025 EV targets and potentially lead to a 7-10% year-over-year decrease in EV sales.
The firm estimates global light vehicle production (LVP) in 2025 to be up 5% year-over-year. The growth is expected to be driven by China, but offset by softer demand in the U.S. and the EU.
For 2026, Mizuho has trimmed its LVP growth estimate from 21% to 15% year-over-year.
In terms of company-specific performance, Tesla's sales figures in February 2025 were highlighted as particularly concerning, with the company underperforming in key markets.
In the U.S., Tesla's sales were down approximately 2% year-over-year, while the market was up 16%. In China, Tesla faced a 49% decline compared to the market's 85% growth, and in Germany, Tesla's sales dropped by 76% against a market increase of 31%.
“We believe TSLA's sales woes are the result of a deterioration in geopolitics, brand perception (US/EU), share loss due to stronger competition (China), and softer-than-expected demand for the Model Y refresh,” Mizuho analysts led by Vijay Rakesh said.
As a result, the analysts reduced their delivery estimates for Tesla from 2.3 million/2.9 million to 1.8 million/2.3 million for 2025 and 2026, respectively.
Still, Mizuho maintains that Tesla remains a leader in the EV and autonomous vehicle markets.
For Rivian, the investment bank believes the carmaker’s EV portfolio is “strong,” but it sees “limited near-term catalysts for the company.”
“Reiterate RIVN at Neutral and lower PT to $11 with general EV sentiment weighing on the sector, as the rollback of tax subsidies in the US and lower consumer sentiment could weigh in deliveries.”
