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Tesla's shares have gained nearly 6% on Monday, following a key Wall Street brokerage's decision to add the stock to its watch list ahead of the automaker's quarterly production and delivery report. However, the electric vehicle (EV) market has been a challenging landscape for Tesla, with slumping demand and heightened competition from Chinese rivals like BYD.

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To address these issues, Tesla has resorted to cutting prices on certain models and is now banking on autonomous driving technologies and robotaxis for future growth. The company's previous price reductions and promotions have had a "diminished" effect on sales, according to Wells Fargo analyst Colin M. Langan.

Lowered delivery expectations

Tesla is expected to report a 6% decrease in vehicle deliveries for the April to June period, compared to the same quarter last year, as per estimates from LSEG. Earlier this year, the company indicated a foreseen slowdown in delivery growth for the year and revised down its target of delivering 20 million vehicles annually by 2030 in its latest annual impact report.

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Analysts' outlook

Despite a 20.4% decline in Tesla's stock performance in the first half of the year, contrasting with a 14.5% increase in the S&P 500 index, a significant portion of analysts maintain a positive outlook on the company. Approximately 40% of analysts recommend a "buy" or stronger rating for Tesla, while another 40% suggest holding the stock, with a median target price of $180.

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Navigating the challenges

Tesla's decision to cut prices and focus on autonomous driving technologies and robotaxis suggests the company is adapting to the changing market dynamics. While the slump in demand and fierce competition from Chinese rivals have put pressure on the automaker, its ability to innovate and respond to these challenges will be crucial in determining its future success.

As the EV market continues to evolve, Tesla's ability to maintain its position as a leader in the industry will depend on its ability to address the concerns raised by analysts and deliver on its ambitious growth targets. The upcoming quarterly production and delivery report will be closely watched by investors and industry observers alike, as they seek to gauge the company's ability to navigate the current challenges and capitalize on the long-term potential of the EV market.

(Inputs from Reuters)