Analysts revisit Tesla stock price targets as Musk faces brand 'crisis'

Tesla shares have lost more than half their value since hitting an all-time high on December 17.

Mar 20, 2025 - 12:17

Tesla shares moved lower in early Thursday trading, extending its months-long decline, amid concerns that Elon Musk's political focus is hurting the EV maker's brand and growth prospects.

Tesla (TSLA) shares are down more than 37% for the year, and have lost more than half their value since hitting an all-time peak in late December as the stock rallied in the wake of President Trump's election victory the previous month.

Musk was closely-aligned to the President during his campaign and has subsequently lead his effort to overhaul the federal workforce through a group named the 'department of government efficiency',.

That role in Washington has, by his own admission, taken him away from the day-to-day operations at Tesla, which is based in Austin, while its political nature has prompted boycotts and vandalism the company's vehicles and showrooms.

Tesla is also recalling around 46,000 of it newly-launched Cybertrucks at the behest of Musk's longtime nemesis, the U.S. National Highway Traffic Safety Administration, in order to repair a faulty exterior panel.

President Trump's efforts to support Tesla sales included an unprecedented display at the White House last week.
Jabin Botsford/The Washington Post via Getty Images

Overall sales are slumping, as well, with heavy declines in Europe and lost market share in China, where its attempting to build a lower-priced Model Y to compete with domestic rivals such as BYD and Xiamoi.

Tesla deliveries in focus

That's prompted a host of downgrades to both Tesla's first quarter and full-year delivery targets from analysts on Wall Street, as well as a broader rethink of its profit margin and growth potential as it transitions from its traditional automaking business to focus on self-driving technologies, energy storage and robotics.

Piper Sandler's Alexander Potter added his name to that list in a note published Thursday that lowered his price target by $50 to $450, but the analyst was more upbeat over the group's longer-term prospects.

"Tesla's now back to its pre-election valuation," Potter and his team wrote. "Remember: this isn't the first time Tesla has doubled and subsequently gotten cut in half, and it likely won't be the last."

Potter lowered his full-year delivery outlook, and noted that recent trends are likely to prompt similar changes from other analysts, but argued that "we don’t think politics are entirely to blame" for the quarterly sales slump.

"Rather, factory shutdowns and the Model Y changeover are the primary causes of lower deliveries," he said.

Musk must address Tesla 'crisis' - Wedbush

Potter also defended his $450 price target, which is based on current multiples for the stock, by noting that his fundamental analysis (which excludes the impact of both robotics and artificial intelligence) still implies value for the beaten-down stock.

"In our view, nothing has changed regarding Tesla's ability to remake the world's transportation and energy markets," said Potter, who kept his 'overweight' rating on the stock in place.

Wedbush analyst Dan Ives, meanwhile, reiterated his $550 price target and 'outperform' rating on Tesla in a note published Thursday, but warned that the company is falling deep into a crisis that only Musk will be able to repair.

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"This is a moment of truth for Musk and there are two things Elon needs to do to end this crisis and make sure it does not snowball into a much more black swan event for the Tesla brand over the coming years," Ives said.

Musk needs to make a formal statement regarding the balancing of his DOGE and Tesla leadership effort, Ives argued, preferably during the group's first quarter conference call next month, while providing clear roadmaps for the low-cost vehicle launch and full self-driving trials in Austin.

"As someone who is a core bull and believer in the Tesla long term growth story, I loudly urge Musk and the board to step up, stop being silent, and help resolve this crisis," he said.

Tesla shares were marked 2.4% lower in premarket trading to indicate an opening bell price of $229.56 each.