Elon Musk made an appearance at his first cabinet meeting with U.S. President Donald Trump at the White House on February 26, 2025. Since Musk’s involvement with the administration, Tesla’s stock has faced its steepest decline. Over the course of seven consecutive weeks, the shares of his automotive company have plummeted, ending Friday at $270.48. This marks the longest losing streak in Tesla’s history as a public entity.
By the end of the week, Tesla’s shares had dropped more than 10%, reaching their lowest point since November 5, right after Election Day, when shares closed at $251.44. Since their peak at nearly $480 on December 17, the company has seen its market cap shrink by over $800 billion.
This week, several major Wall Street firms, including Bank of America, Baird, and Goldman Sachs, lowered their price targets for Tesla stock. Bank of America slashed its target from $490 to $380, expressing concerns over declining vehicle sales and the absence of news on a potential low-cost model from Musk.
Meanwhile, Goldman Sachs reduced its price target from $345 to $320, citing weak electric vehicle sales for Tesla in the early months of the year across Europe, China, and parts of the U.S. They highlighted the intense competition in China, where automakers generally do not require separate software purchases for advanced driving features. Tesla’s Full Self-Driving (FSD) system, available as a premium add-on in the U.S., faces tough market conditions there.
Baird added Tesla to its “bearish fresh picks” list, mentioning that “production downtime” might complicate Tesla’s efforts to scale up manufacturing for the new Model Y SUV version.
Market analysts are not only watching Tesla’s sales and production numbers but are also pondering how Musk’s politics and his role in the White House might affect the company’s prospects. “Musk’s role in the Trump administration introduces uncertainty on the demand side,” noted Baird’s analysts.
Before Musk took on his advisory role to President Trump and led the Department of Government Efficiency, he was already juggling multiple ventures, such as the AI startup xAI, social media company X, and aerospace firm SpaceX.
At present, Musk, who holds the title of the world’s richest person, has put himself center stage in the Trump administration’s push to significantly cut down federal workforce, expenditure, and capacity. Additionally, his bold political statements on X have stirred the pot, as he criticizes judges he disagrees with, while spreading questionable narratives about Ukraine President Volodymyr Zelenskyy.
Anti-Musk and anti-Tesla sentiments are on the rise in both the U.S. and Europe, leading to protests and suspected incidents of arson and vandalism at Tesla sites.
Even staunch Tesla supporters and bullish analysts must admit that Musk’s political stance is affecting the appeal of Tesla and its offerings to a broad array of customers and investors. Cleantechnica, which normally champions Tesla, published a thought-provoking column questioning whether Tesla owners should consider selling their vehicles and whether the Tesla board should relieve Musk as CEO.
Neither Musk nor Tesla has commented on these matters.
Dan Ives from Wedbush Securities wrote in a recent note that Tesla enthusiasts are at a pivotal juncture due to global backlash tied to Musk, DOGE, and Trump’s administration. A “gut check moment for the Tesla bulls” is how he described it. Wedbush, seeing a silver lining amidst the sell-off, has added Tesla to its “Best Ideas” list, with a 12-month target price set at $550.
The rationale is that Trump’s tenure in the White House could foster a deregulatory atmosphere, aligning with Tesla’s strategic vision. The optimistic view sees Tesla possibly releasing new affordable EV models, rolling out a driverless ride-hail service, and deploying humanoid robots for factories in the near future. Ives anticipates Musk will refocus on Tesla and his other enterprises in the latter half of 2025.
Similarly, TD Cowen is upbeat about Tesla’s future. Their note on Thursday suggested that the firm is entering a significant product cycle for 2025-26, potentially revitalizing growth in volume and boosting investor sentiment.
