Tesla’s Auto Revenue Plunged 20% in Q1. Here’s How You Should Play TSLA Stock Here.

Tesla’s (TSLA) automotive revenue tanked a concerning 20% on a year-over-year basis in its first quarter of 2025. Shares of the electric vehicles behemoth are still up more than 8% on Wednesday.  

Investors are cheering TSLA shares primarily because the company’s chief executive, Elon Musk, confirmed plans to step back from politics, encouraging investors who have been complaining about his divided attention for months.  

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Still, there’s reason to consider capitalizing on today’s pop to pull out of Tesla stock that’s currently down some 40% versus its year-to-date high. 

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Tesla Stock Price Could Crash to $120

Tesla shares remain unattractive because the company’s Q1 earnings suggest it continues to struggle with a demand slowdown. 

In its earnings release, the automaker itself attributed much of the financial weakness in its first quarter to lower prices and increased sales incentives. 

That made a number of Wall Street experts lower their expectations for TSLA today. Wells Fargo analyst Colin Langan, for example, now sees Tesla stock as fairly valued at $120. 

His revised price target indicates potential downside of more than 50% from current levels. 

A Cheaper Model Y Won’t Help TSLA Shares

Wells Fargo is bearish on Tesla primarily because its “fundamentals look worse with material tariffs risk in Energy Gen.”

According to Langan, the EV maker was broadly expected to launch a more affordable, “new” model in 2025. However, all it plans on offering instead is “just a cheaper Model Y.” 

A cheaper Model Y may not be positive for TSLA stock as it may only cannibalize demand for the higher priced trims, he added.

Wells Fargo Is Unusually Bearish on Tesla

Investors should note, however, that Langan has a contrarian view on Tesla shares.

Despite internal and macroeconomic challenges that are evidently hurting TSLA financials, other Wall Street analysts remain constructive on the EV stock. 

While the consensus rating on Tesla currently sits at “Hold,” the mean target of $303.08 still translates to potential upside of nearly 20% from current levels. 

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On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.