The recent slide follows a significant cut in price targets by Wedbush Securities analyst Daniel Ives, a long-time Tesla supporter. Ives reduced his forecast by over 40%, pointing to U.S. trade policies under President Donald Trump and brand challenges tied to Musk. Tesla’s stock has now fallen 55% from its peak in mid-December 2024, despite an initial surge after Trump’s election win, fueled by Musk’s close ties to the then president-elect. However, Musk’s involvement in controversies has turned away some customers and sparked protests against the company.
Last week, Tesla reported first-quarter vehicle deliveries that fell short of already lowered expectations, hitting the lowest level since 2022. Ryan Brinkman of JPMorgan Chase & Co., a notably cautious analyst on Tesla, noted: “He may have underestimated the degree of consumer reaction and unprecedented brand damage.” Several analysts had already trimmed sales and earnings forecasts in recent weeks, even before the disappointing delivery figures were released. While Tesla is seen as somewhat shielded from Trump’s 25% tariffs on imported vehicles, Musk has acknowledged the company will face disruptions.
Wedbush’s Ives commented in a Sunday note: “The tariffs in their current form will disrupt Tesla, the overall supply chain, and its global footprint which has been a clear advantage over the years versus rising competitors like BYD.” He highlighted additional concerns about Tesla’s standing in China, a key market. Ives added: “The backlash from Trump tariff policies in China and Musk’s association will be hard to understate, and this will further drive Chinese consumers to buy domestic such as BYD, Nio, Xpeng, and others.”
The stock’s decline reflects challenges beyond production, including shifting consumer preferences and market reactions to external factors. Tesla, based in the U.S., continues to navigate a complex landscape as it balances its global operations and brand reputation amid evolving trade dynamics.
