Tesla's Target Price Cut 43% Amid Political, Trade Uncertainties

Wedbush Securities analyst Daniel Ives has significantly reduced the target price for Tesla (TSLA.US) by 43%, setting it at $315. This adjustment comes in response to the brand crisis caused by CEO Elon Musk and the trade policies of former U.S. President Donald Trump. Ives is one of the most bullish analysts on Wall Street regarding Tesla.

In a report released on Sunday, Ives stated, "Tesla has essentially become a global political symbol." For the past four years, Ives has consistently rated Tesla's stock as a "buy." He now believes it is time for Musk to step up and lead during this uncertain period. Ives' new target price of $315 is the second-highest among the analysts tracked.

Ives' primary concern is that Tesla could face backlash in China due to U.S. tariff policies. Last year, Tesla's revenue from China accounted for more than one-fifth of its total revenue. The Chinese government plans to impose a 34% tariff on all imported goods from the U.S. starting April 10, matching the so-called equivalent tariffs imposed by Trump on Chinese products.

Ives noted in his report, "This will further drive Chinese consumers to purchase domestically produced vehicles from companies like BYD, NIO, and Xpeng. We now estimate that due to issues with domestic brands, Tesla has already lost at least 10% of its future global customer base, and this may be a conservative estimate."

Trump announced plans to impose at least a 10% tariff on all goods imported into the U.S. from any country, with higher tariffs on approximately 60 countries to address trade imbalances. Following this announcement, Tesla's stock price plummeted by 15% over two days, reaching $239.43. The stock has since declined by 50% from its all-time high recorded on December 17 of the previous year.