Tech analyst Dan Ives offers a candid assessment of Tesla Inc. TSLA as demand pressures mount and investor attention shifts toward its autonomy and AI roadmap.
What Happened: Appearing on the Risk Reversal podcast on Tuesday, Ives flagged Tesla’s worsening sales trends in Europe, estimating “15% to 20% permanent demand destruction,” up from his prior forecast of 5%.
“There’s some heavy lifting ahead,” Ives says, citing rising competitive pressures from the likes of Chinese auto giant BYD Co Ltd. BYDDF, both across China and Europe.
With its core EV growth under pressure, Ives argues the company’s future increasingly relies on its autonomy and AI initiatives, while describing the next 6 to 8 months as a pivotal stretch. “You need to show that this is going to ultimately kick off the autonomous vision,” he says, pointing to the upcoming launch of the “CyberCab” as a potential inflection point.
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Speaking on Elon Musk’s artificial intelligence startup, xAI that now owns X (formerly known as Twitter), Ives believes that such a move could help justify Tesla’s premium valuations by embedding advanced AI capabilities directly into its stack.
Ives sees the odds of a Tesla-xAI merger at 35%, “The chance that that happens in the next 6 to 9 months is not 5%, it’s more like 35%,” he says.
Why It Matters: Tesla’s struggles in Europe deepened in recent weeks, with new car sales in Spain falling 36% year-over-year in April, even as Chinese competitors posted a 54% increase over the same period.
The company nonetheless rejoined the trillion-dollar club on Tuesday, following a 40% rally from its April lows. In addition to the easing of trade tensions between the U.S. and China, the promised debut of robotaxis in Austin next month has led to this momentum.
Ives has always been bullish on Tesla’s autonomous plays, stating recently that the company “will own the autonomous market,” since “no one can compete with their scale and scope.”
Others, including fund manager Gary Black, have similar views. Black said he remains bullish on Tesla over the long term, stating that “as EV adoption and demand for autonomy increase, $TSLA remains the best positioned to capitalize on these two megatrends.”
Price Action: Tesla shares rose 4.93% to $334.07 on Tuesday and gained nearly 0.7% in after-hours trading.
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