Tesla's stock has experienced a historic decline, marking seven consecutive weeks of losses since Elon Musk's alignment with the Trump administration. This period, the longest losing streak in Tesla's 15-year history as a public company, has seen share values fall to $270.48, the lowest since Election Day on November 5. The stock peaked at nearly $480 on December 17, leading to a loss of over $800 billion in market capitalization.
The decline coincides with rising anti-Musk and anti-Tesla sentiment in the U.S. and Europe. Protests and suspected criminal acts, including arson and vandalism at Tesla facilities, have become more frequent. This unrest is partly attributed to Musk's role as a prominent figure in the Trump administration's efforts to reduce federal government workforce, spending, and capacity.
Analysts at several financial firms have responded to these developments by adjusting their expectations for Tesla's stock. Bank of America has lowered its price target from $490 to $380, citing concerns over declining new vehicle sales and a lack of updates on a "low-cost model." Similarly, Goldman Sachs reduced its target from $345 to $320, highlighting falling electric vehicle sales in Europe, China, and parts of the U.S.
Baird analysts have added Tesla to their "bearish fresh picks," noting "production downtime" and supply-side issues as Tesla shifts to manufacturing a new version of its Model Y SUV. They also indicated that Musk's involvement with the Trump administration adds uncertainty to the demand side of Tesla's business.
"Tesla bulls find themselves with their back against the wall facing global negative sentiment around Musk/DOGE and the Trump Administration." – Dan Ives
Despite these challenges, some analysts remain optimistic about Tesla's future. TD Cowen analysts believe Tesla is entering an early phase of a significant product cycle for 2025-26, which could rejuvenate volume growth and improve overall share price sentiment.
"Tesla now appears to be in the early innings of a major 2025-26 product cycle, one that we believe could re-invigorate volume growth and boost overall share price sentiment." – TD Cowen analysts
Elon Musk has shifted his focus more towards his other ventures, including xAI, X, and SpaceX, during the second half of 2025. His comments on social media platform X have also drawn attention for their incendiary political rhetoric, including criticism of judges and promotion of false Kremlin narratives.
Tesla faces additional competition challenges in China, especially for its Full Self-Driving (FSD) system. Key competitors in the region do not require a separate software purchase for smart driving features, intensifying the competitive environment.
"The best thing that ever happened to Musk and Tesla was Trump in the White House as this will create a deregulatory environment with a federal autonomous roadmap central to the Tesla golden strategic vision." – Wedbush