Tesla's stock has experienced a significant surge since election day, driven by investor optimism rather than fundamental business improvements.

However, UBS Group AG analysts caution that recent policy proposals may not necessarily benefit the company as much as expected.

The potential removal of consumer tax credits for electric vehicle purchases could require Tesla to lower prices, which would impact its profitability.

Additionally, while the regulatory environment may become more favorable for artificial intelligence and autonomous vehicles, Tesla currently does not have a robotaxi ready for launch to take advantage of these changes.

Joseph Spak, the lead analyst, maintains a sell rating on Tesla shares but has adjusted his price target to $226 from $197.