Tesla May Reap Over $1B In EU Emission Fees From Rivals, But Retail Sentiment Wavers After Stock's Rally Cools

The EV maker’s stock closed below $400 on Tuesday for the second time since the new year started.

Tesla shares have encountered turbulence after a strong rally following Donald Trump's election. Despite a new report suggesting a potential windfall due to stricter EU pollution regulations, retail investors are growing cautious.

A Bloomberg report reveals that UBS analysts estimate Tesla could earn over €1 billion (about $1.03 billion) in compensation from rival automakers struggling to meet stricter emissions standards in Europe. 

According to the report, which cites a European Union document, Tesla will join a pool of electric vehicle manufacturers, including Toyota, Stellantis, and Ford, to average carbon dioxide emissions across their fleets.

However, Tesla's stock closed below $400 on Tuesday for the second time since the beginning of this year, marking a good pullback from its all-time intraday high of $488 in December. 

The recent slide follows profit-taking, a regulatory probe into its driverless feature, and broader market declines linked to fading expectations of a Federal Reserve rate cut. 

Retail sentiment on Stocktwits remained 'neutral' on Wednesday morning, the score a notch lower than a week ago.

Optimists see the recent pullback as healthy, with some predicting strong support at $394 and a return to $400+ territory. 

However, skeptics point to missed fourth-quarter deliveries and CEO Elon Musk's political distractions as potential concerns.

Tesla gained over 64% in 2024 and has risen 1.5% so far this year.

According to Koyfin data, Tesla's highest price target is $528, and its shares are currently trading 25% above the average target of all analysts covering the stock.

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