Buying Tesla shares with target at 400 amid upcoming robotaxi launch

Tesla’s stock posted a decline in early June, hovering around $342 per share. Elon Musk’s decision to leave the Donald Trump administration and focus on the company has sparked some interest among investors. Yet, fundamental factors continue to weigh on the electric car producer’s stock. 

Falling sales in key regions remain a serious issue for Tesla. Car deliveries in France and Sweden dropped 67% and 53.7%, respectively, in May. Germany and the UK saw sales almost halving in April. Besides, competition with Chinese manufacturers is intensifying. In May, BYD surpassed Tesla in European sales for the first time. Meanwhile, escalating trade tension between the US and China is adding to the negative impact on demand among Chinese consumers, who start to favor local brands more often.

Amid these challenges, the company is set to launch its robotaxi service in Austin on June 12. The project is seen as a potential growth driver, able to open up new revenue streams through autonomous taxis. Such companies as Waymo are already ahead of Tesla in this area with a more transparent approach to testing and technology adoption. However, Tesla has a lower cost of production unlike its competitor, $50,000 versus $180,000 per unit. This could allow Tesla to scale the service faster and offer lower consumer prices.

Technical signals are mixed. On the one hand, the price is above the key support levels and moving averages, which supports an uptrend. On the other hand, the indicators (RSI and OBV) are signaling a correction in progress. If the price holds above the middle Bollinger band (327), the stock may resume growth to the upper band (385). Overcoming the upper band could trigger a move up to $400 per share.

Current recommendation:

Consider buying at the current price in case of a correction to 327. Take profit – 400. Stop loss – 320.