Mizuho Securities analysts downgraded electric vehicle (EV) manufacturers Tesla (NASDAQ:TSLA), Rivian (NASDAQ:RIVN), and Nio (NYSE:NIO) to Neutral from Buy.
“While we remain constructive on the broader EV landscape with the LT trend to electrification, near-term EV demand and tightening liquidity are creating challenges into 2025E,” analysts said.
Meanwhile, the investment firm maintained General Motors (NYSE:GM) and Autoliv (NYSE:ALV) at Buy.
Mizuho now anticipates approximately 15% year-over-year growth for the EV market in 2024, compared to their previous estimate of 25% and against IHS's forecast of roughly 33%. For 2025, they project a 17% increase, while IHS predicts a 34% rise.
They cite several reasons for this adjustment, including EV inventories being double those of internal combustion engine (ICE) vehicles, diminished consumer affordability due to auto pricing surging by about 30% over the past three years—significantly higher than the long-term compound annual growth rate (CAGR) of 5%.
Moreover, analysts point to cuts in EV subsidies in the US and EU, and price wars in the Chinese EV market as contributing factors to their revised outlook.
For TSLA, Mizuho has lowered its price target from $270 to $195. RIVN saw its target cut from $24 to $12, and for NIO, analysts reduced the price objective from $15 to $5.5.