Introduction

Recently, Bank of America made a notable adjustment to its rating for Tesla, particularly highlighting the "enigmatic role" of self-driving taxis as one of the significant risks facing the company.

What lies behind this development?

Let's delve into this together with No One Car Coming (public account: No One Car Coming).

(For reference, please click:

Tesla: Multiple Vehicles with Full Self-Driving (FSD) System Experience Failures, 77,000 Vehicles Recalled! A Turbulent Start to 2025)

I. The Enigma Behind Bank of America's Rating Adjustment

According to Yicai Global:

On January 8, 2025, Bank of America analysts dropped a bombshell.

Since upgrading Tesla's (TSLA.O) rating in April of last year, news about Tesla and investor sentiment have largely been positive. However, analysts clearly pointed out that Tesla's execution risks are substantial.

Due to these risks, Bank of America downgraded Tesla's rating from "Buy" to "Neutral." Intriguingly, the target price was raised from the previous $400 to $490. This combination of a downgrade and a price increase has left investors anxious. What risks make Bank of America so cautious? Among them, the self-driving taxi set to launch in mid-2025 holds a crucial position, accounting for nearly half of Tesla's valuation! Additionally, Tesla's mass production plan for the first quarter at its Shanghai assembly plant and the launch of a low-cost model in the first half of 2025 are also listed by Bank of America as important factors affecting Tesla.

II. Self-Driving Taxis: A Double-Edged Sword

The Alluring "Pie".

First, let's consider the alluring aspects of self-driving taxis. Imagine a street filled with taxis that don't require drivers; what an exhilarating scene!

Tesla has been dedicated to the development of autonomous driving technology. If self-driving taxis can be successfully launched and commercially operated, it would be akin to unlocking a treasure trove of wealth.

From a market potential perspective, the global mobility market is a colossal "pie".

According to relevant research institutions, the self-driving taxi market is expected to experience explosive growth in the coming years.

Taking a report from an authoritative institution as an example, it is estimated that by 2030, the global self-driving taxi market could reach hundreds of billions of dollars.

With its technical expertise in electric vehicles and autonomous driving, if Tesla can secure a position in this market, the benefits would be immense.

The Hanging "Sword of Damocles".

However, idealism abounds, but reality may be harsh. For Tesla, self-driving taxis are more like a hanging "Sword of Damocles," fraught with risks.

The first is the challenge at the technical level. Although Tesla has made significant progress in autonomous driving technology, there is still a long way to go before fully reliable self-driving taxi operations can be achieved.

Take the recent failure of Tesla's autonomous driving system as an example. On January 6, 2025, the computer system of Tesla's Full Self-Driving (FSD) system experienced frequent failures, causing severe issues for multiple users during usage and even leading to dangerous driving conditions.

Incidents such as sudden system crashes, loss of navigation instructions, and misjudgments by automatic braking have occurred repeatedly. This has raised profound doubts about the reliability of its autonomous driving technology.

The second is the uncertainty of regulations and supervision. Self-driving taxis involve many critical issues such as public safety, and regulations and supervisory policies for this emerging field are still being continuously refined in various countries.

Regulations vary greatly among different countries and regions. For Tesla to promote self-driving taxis globally, it must adhere to local regulatory requirements.

Furthermore, market competition is fierce. The autonomous driving field has attracted the attention of numerous technology giants and startups, all eager to secure a slice of this burgeoning market.

For instance, Waymo, a subsidiary of Google, has invested heavily in autonomous driving technology research and development and has already conducted pilot operations of self-driving taxis in some regions. There are also domestic technology companies such as Pony.ai, WeRide, and AutoX that are actively deploying in the autonomous driving field.

Tesla faces competition from rivals worldwide, and standing out in this intense competition will not be easy.

III. Other Risk Factors: Tesla Under Siege from Multiple Fronts

In addition to the "top risk" posed by self-driving taxis, the mass production at Tesla's Shanghai assembly plant and the launch of low-cost models also present significant challenges to Tesla.

As an important production base for Tesla globally, the Shanghai assembly plant will commence mass production in the first quarter, placing extremely high demands on production management, supply chain coordination, and other aspects. Once supply chain disruptions or quality control issues arise during production, they may impact product delivery and market reputation. For example, a certain automobile brand previously experienced delays in new car deliveries due to supply chain issues, leading to consumer dissatisfaction. Tesla must avoid repeating this mistake.

Moreover, the low-cost model set to launch in the first half of 2025 is expected to further expand market share but also faces the challenges of cost control and brand positioning.

Improper cost control may affect profit margins;

Inaccurate brand positioning may also impact Tesla's existing high-end brand image.

For instance, after a certain high-end brand launched a low-cost model, consumer recognition of its brand declined.

IV. What Does the Future Hold for Tesla?

Faced with the risks pointed out by Bank of America, Tesla's future is fraught with uncertainty. Whether self-driving taxis will lead Tesla to new heights of glory or become the final straw that breaks the camel's back remains to be seen. However, it is certain that Tesla must meticulously address these risks. In terms of technology research and development, it must increase investment to enhance the reliability and stability of autonomous driving technology, ensuring that self-driving taxis can operate safely and stably through extensive testing and validation.

Regarding regulations and supervision, it is necessary to actively engage with governments of various countries, participate in the formulation and refinement of regulations, and make early preparations for compliance. In terms of market competition, it is essential to leverage its own advantages, continuously innovate, and boost the competitiveness of products and services. For investors, Bank of America's rating adjustment and risk warning are undoubtedly important references. Investing in Tesla is akin to placing a bet in an adventure replete with variables. In summary, No One Car Coming (public account: No One Car Coming) believes that Tesla should heed Bank of America's warnings! In the future, let's observe how Tesla "rides the waves" amidst these risks and sails to the shores of success! What do you think, dear readers?