22V Research has issued a bullish call on Tesla (TSLA) stock, setting a “Buy” rating with a $325 price target. The investment firm believes Tesla is positioned for a rally despite recent headwinds, including weak European sales and intensifying competition.

Tesla's European challenges deepened in July as new car registrations plummeted 40% year-over-year (YoY) to 8,837 vehicles. It was Tesla’s seventh consecutive monthly decline in the region. The downturn occurred despite overall European battery electric vehicle sales rising, highlighting Tesla's region-specific headwinds.

Chinese competitor BYD (BYDDY) capitalized on Tesla's weakness, recording 13,503 registrations, a 225% annual increase. In addition to rising competition, Tesla is grappling with damage to its brand reputation from CEO Elon Musk's controversial public statements, as well as an aging product lineup that lacks recent refreshes.

However, 22V’s bullish thesis centers on new product launches, ongoing innovation in artificial intelligence (AI) and EV technologies, and potential improvements in profitability. Key catalysts include Tesla's ability to navigate regulatory hurdles, capitalize on growing demand in key markets, and leverage CEO Elon Musk's strategic vision around advancements like voice assistant AI and upcoming products such as the Optimus humanoid robot.

Is Tesla Stock a Good Buy Right Now?

Tesla's robotaxi service launched successfully in Austin, Texas, marking a significant milestone in the shift toward autonomous transportation. CEO Elon Musk projects that coverage will be available for half the U.S. population by year-end, subject to regulatory approvals. 

Musk also claimed that Tesla has "the best intelligence density of any AI by far." FSD (full self-driving) adoption has increased by 25% since the launch of version 12, and vehicles equipped with FSD demonstrate a claimed 10 times better safety than those without it.

The Optimus humanoid robot program might unlock another billion-dollar revenue stream, with production prototypes expected by year-end and potential for 1 million units annually within five years. Additionally, Tesla's energy storage business achieved record profitability despite tariff pressures in Q2.

Alternatively, Tesla faces immediate challenges from the elimination of $7,500 EV tax credits and rising tariff costs ($300 million impact in Q2). Musk warned of potential "rough quarters" ahead, particularly Q4 through Q2 of 2026. The company's ambitious timelines have historically faced delays, and regulatory approvals for autonomous services remain uncertain.

Furthermore, capital expenditure exceeds $9 billion annually, which strains free cash flow generation. Competition in EVs intensifies globally, while Tesla's product lineup requires refreshing.

What Is the Target Price for TSLA Stock?

Analysts tracking Tesla forecast revenue to rise from $92.77 billion in 2025 to $208 billion in 2029. In this period, adjusted earnings are forecast to expand from $1.69 per share to $9.46 per share. 

If TSLA stock is priced at 60 times forward earnings, which is not too steep, given its growth estimates, it could trade around $565 in early 2029, indicating an upside potential of 63% from current levels.

Out of the 42 analysts covering TSLA stock, 12 recommend “Strong Buy,” two recommend “Moderate Buy,” 18 recommend “Hold,” and 10 recommend “Strong Sell.” The average TSLA stock price target is $299, below the current price of $345. 

TSLA stock faces mounting competitive pressure from traditional automakers and EV specialists, while regulatory uncertainty around autonomous driving capabilities remains. The company's high valuation multiples leave little room for execution missteps, and Musk's involvement in various ventures could create distractions from Tesla's core business focus.