Tesla's (TSLA) upcoming challenges are mostly linked to the current uncertain macro conditions, including tariffs and the US relationship with China, BofA Securities said Wednesday in a research note.

The company procures its lithium iron phosphate batteries and a relevant portion of its manufacturing equipment from China, BofA said. Also, the company has temporarily paused its volume guidance due to tariff uncertainty. China's restrictions on rare earth minerals could also negatively affect Tesla's business as the minerals are used in permanent magnets for electric motors, the bank noted.

However, the bank also noted a few positives from the company's first-quarter earnings call, including the fact that its planned robotaxi launch remains on track for June and its affordable vehicle still appears on track to be unveiled in the first half of 2025. Also, its unsupervised full self-driving vehicle is expected to be launched in the US by 2025-end.

BofA also noted that the company's "highly regionalized supply chain" mitigates the tariff risk factor for its auto business.

BofA said Tesla's Q1 non-GAAP earnings of $0.27 per share were below estimates, but still "better than many expected." The BofA estimate was $0.35 and consensus was at $0.38.

The analysts lowered their full-year EPS estimate to $1.88 from $2.15 mainly due to higher spending on research and development, and selling, general and administrative expenses.

BofA reiterated neutral rating and a price target of $305 on the stock.

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