Tesla's Tumultuous Ride: Market Slump Amid Musk's Political Engagement Spurs Investor Anxiety
1min read Tesla's stock has faced a persistent decline in the face of Elon Musk's political engagement with the Trump administration. Over the past seven weeks, the company has seen its stock price drop to $262.67, marking the longest losing streak in its 15-year history on the stock exchange. The firm's market value has plummeted over $800 billion since its peak last December.
This staggering decline has prompted several major Wall Street investment banks to revise their price targets for tesla. In light of decreasing vehicle sales and the absence of updates on a low-cost model, institutions like bank of america have adjusted their forecasts from $490 to $380 per share. Additionally, pressure on Tesla's Full Self-Driving (FSD) system is mounting, especially in China where competitors offer intelligent driving features without additional charges, intensifying the competitive landscape for Tesla.
The broader atmosphere isn't helping either. Musk's role within the Trump administration and his controversial political comments on social media platforms have raised concerns about the potential long-term impact on Tesla's market demands. Investors are wary of how his political affiliations and governmental responsibilities might cast doubt on Tesla's brand integrity and customer appeal.
This political backdrop has sparked protests across Tesla facilities globally, with incidents of sabotage and arson reported, further shaking investor confidence. There is a dual sentiment—a recognition of the damage Musk's political stances might inflict on Tesla’s brand and the market's reaction to his controversial public persona.
Despite the tumult, some investors remain hopeful. Wedbush Securities maintains a bullish outlook on Tesla, citing opportunities that may arise from deregulatory policies under the Trump administration that could favor autonomous driving technology—an area central to Tesla's strategy. They have included Tesla in their "Best Ideas" list, even amid the prevailing market skepticism.
Optimistic projections continue to surface, with expectations for the launch of affordable electric models, development of automated taxi services, and the creation of humanoid robots designed to assist in manufacturing. Analysts foresee Musk re-dedicating his focus towards Tesla by late 2025, potentially revitalizing the company's trajectory and fulfilling its lofty ambitions.
Meanwhile, TD Cowen analysts express positive sentiments regarding Tesla’s future, suggesting that the company is entering an early phase of a crucial product cycle for 2025-2026. They anticipate this period would boost sales and renew investor confidence, thus possibly reversing the current bearish trends affecting Tesla’s stock.
