For Tesla, it has been one week and then some.
Fresh information from car-shopping guides In March, a month following new-model shopping considerations for Tesla electric vehicles at their lowest point since October 2022, Edmunds reveal a record amount of Tesla trade-ins for purchases of new automobiles.
Furthermore, a well-known Tesla bull confirmed the buy rating of the stock but voiced concerns about the company’s lack of action on the declining stock value. And more than 45,000 Cybertrucks – practically all of the controversial electronic vehicles ever produced – were just recalled.
Deep ties between Tesla Chief Executive Elon Musk and the Trump administration have grown to be a major issue with no simple fix at hand. Reassuring, even promotional, remarks from Musk, Commerce Secretary Howard Lutnick, and President Donald Trump personally have not been able to stop the negative flow.
Add to all that the continuous uncertainty about the U.S. economy, as well as the drama surrounding tariffs, and the outcome by now looks familiar for the stock: Tesla shares (TSLA) are set for another weekly loss, thereby placing the legendary “Trump bump” farther in the rearview mirror.
On Friday morning trading, the stock increased 1.6%; yet, it dropped 4% over the week.
By far the greatest run of drops since the business went public in June 2010, that puts the stock on path for a ninth consecutive weekly loss. Six weeks was the previous record, which happened four times.
Since its postelection record closing of $479.86 on December 17, the stock has dropped 50% through Thursday, wiping off around $772.6 billion in market capitalization.
Amid rumors of mounting shareholder discontent, the most recent decline has caused a significant increase in short sells, or pessimistic expectations on the stock. Data supplied by S3 partners shows that short interest has climbed by about 15% to close to 71 million shares since mid-February.
The only company among the 20 most valuable firms in the S&P 500 index SPX to have dropped over that period, even if it has recovered 38.8% over the preceding 12 months, trading 32% below where it ended 2021.
Although many Wall Street analysts have grown somewhat less optimistic given all the events, a good share of them still advise buyers of the company.
Adam Jonas of Morgan Stanley said late Thursday that although he was maintaining the equivalent of a buy rating on Tesla’s stock, he was cutting his price target on the shares to $410 from $430.
Though mainly below estimates, Tesla’s worldwide sales are “not particularly narrative changing for our investment thesis,” Jonas added.
Due “competition, an aging lineup and a buyers’ strike from negative brand sentiment,” he said, he joined several others in slashing predictions for Tesla’s sales for both the first quarter and for 2025.
These reduced sales, however, are “emblematic” of a firm in change from an automobile “pure play” to a highly diverse artificial-intelligence play, which many on Wall Street are not entirely predicting. He so maintained his buy rating and is not alone in this regard. Out of 58 analysts FactSet polled on Tesla, 29 have a buy rating for the company, somewhat higher than 27 in December. Fifteen grade it as a hold; fourteen as a sell.
Complementing the depressing story, the National Highway Traffic Safety Administration revealed on Tuesday a Cybertruck recall, offering a look into the estimated 1% problem count of 46,096 cars sold in the United States so far.
Since the Cybertruck recall involves a cosmetic trim on the exterior of the vehicle known as the cant rail, unlike many past Tesla recalls where the issues were resolved by over-the-air software upgrades, the Cybertruck recall most certainly involves a physical repair. The NHTSA reported that the cant rail stainless-steel panel may fall off affected vehicles, posing a driving danger.
This week too, Itay Michaeli of TD Cowen Securities conducted an experiment on Tesla sales in “red,” or Republican-leaning, states, vs “blue,” or Democrat-leaning, states. “Recent concerns over a growing political divide around Tesla’s brand are legitimate,” the expert remarked.
Could there be a situation, though, whereby Tesla loses market share in blue states but gains in red states? Based primarily on EVs not being as popular in red states as in blue ones, Michaeli concluded that in two out of his three scenarios Tesla would pick up more sales, bringing up the possibility of market-penetration increases.
Michaeli stated, “To be sure, if this were to play out, headwinds would probably materialize before tailwinds, so this isn’t a call on [near-term] demand,” noting he would still expect a “tough” first quarter for Tesla sales. Early April is anticipated to see quarterly sales reported by the EV manufacturer.
Michaeli’s “base case” anticipates a sales drop between 22% and 28% in blue areas, while in red states EV adoption climbs to 9.7% from roughly 5%. Tesla grabs a 55% share. The expert noted that that 9.7% rise is an extrapolation from EV-adoption curves over numerous red counties in Texas. That would push Tesla to a net gain of roughly 107,000 vehicles, the analyst remarked.
Under a “conservative case,” whereby red-state adoption is roughly 7%, Tesla suffers a net sales loss of 11,000 to 37,000 vehicles. Conversely, Michaeli claimed, a “aggressive case,” with red-state acceptance close to 20%, gets Tesla a net gain of about 490,000 vehicles.
With General Motors Co. (GM) EV sales most certainly benefiting the most followed by EV sales at Ford Motor Co. (F), the analyst added, other EV makers would also profit from increased adoption in blue states and from “presumed EV cross-showing” in red states.
