Tech visionary and billionaire Elon Musk's electric car company is headed for tough times. Tesla shares have already lost 34 percent of their value since January. But a stock expert at US bank Wells Fargo still believes the stock is overvalued.

“Today Tesla shares look like growth stocks without growth,” the expert wrote to justify the downgrade from “neutral” to “underweight” (recommendation to underweight the stock in one's own portfolio, editor's note). At the same time, he reduced his price target for Tesla by more than a third from $200 (approx. 183.51 euros) per share to $125 (approx. 114.69 euros).

Demand for electric cars expected to fall in 2024, BYD makes life more difficult for Tesla

Overall, demand for electric cars will decline in 2024, Business Insider reports. But this exacerbates the already fierce competition between Tesla and its Chinese rival BYD. Therefore, in 2024, Tesla will face the dilemma of entering into an ugly discount battle with BYD or accepting declining sales figures.

“We are seeing a risk of declining sales as price reductions will likely have a negative impact,” the Wells Fargo expert wrote. “We see headwinds from disappointing delivery numbers and price reductions, which will likely lead to a revision of the EPS (earnings per share) forecast.”

Tesla's new Model 2 is also likely to disappoint because its production was “rushed.” Furthermore, mathematically it is not a particularly profitable model.

Get informed, understand, make the right decisionsHere you can get general information about current financial news. Every Friday as a newsletter.

*Fields marked with an * are required