- Tesla shares fell Monday as the selloff fueled by President Trump’s new tariffs continued.
- Wedbush analysts led by Tesla bull Dan Ives cut their price target for the stock nearly in half because of the “brand crisis tornado” surrounding the EV maker.
- The analysts estimated that Tesla has alienated “at least 10% of its future customer base” because of CEO Elon Musk’s involvement in the Trump administration.
Tesla (TSLA) stock tumbled Monday as the selloff sparked by the Trump administration’s new tariffs continued, and Wedbush analysts led by bull Dan Ives cut their price target for the stock to $315 from $550 previously.
The analysts called the current tariff uncertainty a “double whammy” for Tesla, as it will negatively impact the electric vehicle maker’s costs and profit margins, and also drive more negative reaction to CEO Elon Musk and the brand, leading to lower sales.
“Tesla has essentially become a political symbol globally….and 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,” the analysts wrote.
They estimated Tesla has lost “at least 10% of its future customer base” over “self created brand issues.” The impact will also be felt in China, where the analysts said the impact of Musk’s association with the Trump administration could drive Chinese consumers to buy increasing numbers of EVs made by domestic companies like BYD.
The analysts called for Musk to “step up, read the room, and be a leader in this time of uncertainty.” They said their bullish view of Tesla remains for the long term but “there is no denying this is a pivotal moment of truth for Musk to turn things around…or darker days are ahead.”
Tesla shares were down almost 6% in late-morning trading Monday and have fallen about 44% since the start of the year.
For more on the broader market’s reaction to the latest tariff news, check out Investopedia’s live markets blog.
