It’s hard to find anything “analogous” in automotive history to the ongoing crisis at Tesla, JP Morgan warned, as the automaker’s global sales collapse, its stock price further tumbles and CEO Elon Musk’s once hero image goes up in flames. There are few signs Pres. Donald Trump’s enthusiastic endorsement of the brand last week will generate sales. If anything, Tesla itself now warns, the company could get caught up in Trump’s trade war.
Tesla stock was set to open substantially down again on Weds. morning 3/18/25.
After a brief rebound earlier in the week, Tesla stock again tumbled sharply on Monday, investors worried by new reports suggesting the automaker’s first quarter global sales will fall considerably short of already weak forecasts.
While there had been hope Pres. Donald Trump’s effort to hype Tesla and its products during a pitch on the White House lawn last week would bring out Conservative buyers, the stunt has largely generated new backlash. If anything, it appears to have resulted in even stronger calls for boycotts of the brand. The automaker sent an urgent warning to the U.S. trade ambassador it could get caught up in Trump’s tit-for-tat trade war. Already, Canada and various cities and provinces are considering new sanctions specifically targeting Tesla products.
“We struggle to think of anything analogous in the history of the automotive industry in which a brand has lost so much value so quickly,” wrote JP Morgan auto analyst Ryan Brinkman in a note to investors this week, as Tesla seems bound to lose more ground for the ninth consecutive week.
The numbers game
Musk has been the subject of several different forms of protest, including this not-so-subtle jab.
Tesla’s stock price has traditionally ridden a roller-coaster but it’s never gone to the extremes seen over the last 52 weeks.
The share price rebounded from a weak 52-week low when president Donald Trump one reelection last November. It hit a mid-December high of $488.54 before losing momentum as the inauguration approached. Since then, it has turned into a rout. There have been a few short-lived upturns but shares traded on the NASDAQ under the TSLA ticker fell nearly 5% on Tuesday and continued losing ground during overnight trading.
A number of factors are factoring into the decline, including the automaker’s weak fourth-quarter sales and earnings and the prospect that things will only be worse going forward, While there are still some bulls who see shares eventually rebounding, the mood on Wall Street has clearly soured.
Brinkman is just one of the many analysts cutting forecasts for both Tesla sales and its stock. He originally expected the automaker to deliver about 444,000 vehicles during the first quarter, cutting that now to just 355,000. Brinkman also reduced his price target to $120 a share, down from an already weak $135.
The backlash
Tesla CEO Elon Musk’s behavior – including what many saw as a Hitler salute – has generated an increasing backlash to the automaker’s products.
For years, the numbers seemed to work in Tesla’s favor. Its sales grew each year by double, even triple digits – to become the world’s largest seller of EVs. In the process, it proved to the world a company could make money on battery-electric vehicles. With some of the best margins in the automotive industry and promises to expand into new realms with robocabs and humanoid robots, investors responded with the sort of stock multiples normally reserved for tech giants like Apple, NVIDIA and Microsoft.
Then Tesla CEO bought Twitter, renaming the social media giant X and turning it into an outlet for conservatives. The approach spurred anger among some Liberals – the bedrock of Tesla sales – but appeared to work as Musk joined forces with then-candidate Donald Trump, investing an estimated $277 million in the campaign. The entrepreneur emerged from the election as one of the newly elected president’s top advisors, but his work – and image has become only more controversial, particularly his role leading the Department of Government Efficiency, or DOGE.
What began as pushback by some buyers has turned into a full-on boycott in some quarters – and not just in the United States. Sales since the beginning of the year are off about 50% in Europe, and down more than 75% in the key German market. A new study this week found 94% of German buyers saying they would not buy a Tesla.
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Tesla boycott grows
A dozen Teslas were torched at a dealership in France.
Tesla is parsimonious with sales numbers. It only reports them quarterly and then doesn’t break out by market. That leaves tracking services and other analysts struggling to find sources they can rely on. Based on registration data, Tesla saw an 11% decline in U.S. sales in January, according to S&P Global Mobility. And estimates are now calling for a further downturn for February and March, even though overall EV demand is up by low double-digits.
There are signs things could get worse as more and more of Tesla’s largely liberal and green-minded buyers turn against the brand, many switching to alternative EV manufacturers such as Kia, General Motors and Volkswagen.
From New York to Los Angeles, showrooms are facing regular – in some case daily – protests. Boycott has turned into vandalism in many places. A dealership in France was torched. Stores in the Pacific Northwest have faced firebombs and gunshots. Many Tesla owners have now reported having their personal vehicles targeted, in some cases finding swastikas painted onto or scratched into their paint – a reference to Musk’s two Nazi-style salutes during a Trump inauguration event.
It’s not just Tesla’s EV sales that analysts and investors are worried about. Much of the run-up in Tesla stock over the past couple years has reflected CEO Musk’s promise to deliver strong revenue lines for things like the Full Self-Driving software and the self-driving CyberCab due to market in 2026. But while RBC analyst Tom Narayan wrote this week that worries of an EV sales slump were “overblown,” he lowered his expectations for what those other business lines will eventually generate.
Trump weighs in
During an event on the White House lawn, Trump said he purchased a Tesla to show support for Musk, who has been the subject of mounting protests and a global boycott.
In the weeks after the inauguration, Musk was widely seen promoting the new administration and his own work with DOGE, at one point wielding a chainsaw to demonstrate his plan to slash government spending.
More recently, his mood has clearly soured. During an interview with “Kudlow” host Larry Kudlow on Fox Business last he admitted he was having “great difficulty,” when asked how he was running his businesses.
President Trump tried to lend support with his pitch for Tesla on the White House lawn, describing its vehicles with wide eyes and hawking them to the public. The stunt did draw praise in some quarters – though critics questioned its legality and analysts downplayed its potential to boost sales among MAGA voters who have traditionally echoed Trump’s anti-EV stance.
“While as many members of the political right may be as pleased as those on the left are displeased, the effect on Tesla sales seems nevertheless negative,” Brinkman wrote.
Caught up in the trade war
Toronto Mayor Olivia Chow announced Tesla vehicles will not be eligible for incentives aimed at encouraging taxi owners to buy EVs.
Making matters worse, Tesla itself has warned it could be caught up in Trump’s growing trade war. In a March 11 letter to U.S. Trade Representative Jamieson Greer, the automaker said in an unsigned letter that, “U.S. expoerters are inherently exposed to disproportionate impacts when other countries respond to U.S. trade sanctions.”
Government officials in a number of countries have specifically called out Tesla as they prepare to respond to new U.S. tariffs. Some moves are relatively symbolic: the city of Toronto this week announcing it no longer will provide incentives for Tesla vehicles purchased as taxis or for ride share services.
“The vehicles for hire, like taxis, will have to find a different kind of car,” Toronto Mayor Olivia Chow said Monday. “There are other electric cars they could purchase.”
Potentially more significant, several members of the Canadian parliament have proposed 100% tariffs on Tesla products – though that call has so far not been taken up by the country’s new Prime Minister Mark Carney.
Tesla leaders sell of their own shares
Tesla Chair Robyn Denholm was one of four top Tesla officials selling off a collective $100 million in stock this past month.
Increasingly nervous investors appear to be looking for signs that can indicate whether the slump in Tesla stock is bottoming out, or set to accelerate. They’ve gotten one from senior management, though “Whenever insiders, including directors, are selling shares, it’s not a positive signal,” Jay Ritter, a professor of finance at the University of Florida, told ABC News.
Since mid-February, four top officers have sold off over $100 million in shares. The list includes Chairman Robyn Denholm and, most recently, James Murdoch, the now-estranged son of Fox chief Rupert Murdoch and a Tesla board member since 2017. Even Musk’s brother Kimbal has been offloading shares, $27 million worth last month.
Tesla will report first-quarter sales and earnings next month. Wall Street has already baked in some negative expectations, according to various analysts. But the question is whether they may not have lowered their forecasts enough. Until then, several have advised investors, there seems to be little that could halt, never mind reverse the decline in TSLA shares.
And there seems little Musk now can do to reverse the ongoing consumer backlash, even a presidential endorsement seeming to do little to move its metal.
Musk doesn’t realize it but he’s been set up to take a fall for for his new buddy Trump. He’s doing Trump’s dirty work as his hatchet man at DOGE and taking all the blame and seeing his car company being trashed. Ironically some who attack Tesla are affluent liberals who once bought Teslas to help the environment. Well, he won’t be the first one Trump has thown under the bus. Maybe Elon, you should talk with Michael Cohen & Rudy Giuliani……