Wall Street analyst Dan Ives, long bullish on Tesla, has soured on the stock.
In a note published Sunday, Ives’ firm, Wedbush Securities, slashed its 12-month price target for Tesla stock from $550 to $315, a 43% reduction.
“Tesla has essentially become a political symbol globally,” the firm wrote. “That is a very bad thing for the future of this disruptive tech stalwart and the brand crisis tornado that has now turned into an F5 tornado.”
Ives says Musk’s foray into politics hasn’t been a great look for the carmaker. The firm estimates that Tesla has already lost 10% of its future global customer base — a conservative estimate — based on “self-created brand issues.”
Brand issues aside, the firm said the biggest reason for the price target cut is the impact President Donald Trump’s new tariffs will have on its trade relationship with China.
Trump has collectively levied a 54% tariff on Chinese goods coming into the United States since taking office in January. China retaliated on Friday with its own 34% tariff on US goods.
While Trump’s tariffs may not significantly impact Tesla due to its large US manufacturing footprint, the company still relies on car parts from China, like batteries.
The political backlash to Trump and Musk in China, however, will likely affect Tesla’s sales in the key EV market. Wedbush wrote that Chinese consumers are more likely to opt for domestic cars made by BYD, Nio, and Xpeng.
The firm also pointed to already evident examples of loss, including Tesla’s delivery numbers for the first quarter of 2025, which came in at nearly 336,700, a 13% year-over-year decrease. “This could be a brutal year ahead if Musk does not exit stage left or take a step back on DOGE in the coming month,” Wedbush said.
Even early Tesla investor Ross Gerber has bristled at Tesla’s decline. “The high-end EV business has totally eroded. The cybertruck is basically not selling. The brand is broken and may not be fixable,” he wrote in a post on X last week.
The company’s stock price has dropped almost 37% since the start of the year and over 50% from a record high on December 17, 2024.
Tesla did not immediately respond to a request for comment from Business Insider.
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