Tesla’s (TSLA) stock is in the midst of its longest losing streak since going public 15 years ago, with shares falling for seven consecutive weeks since Elon Musk joined President Donald Trump’s administration. The EV stock currently trades near $225, down more than 50% from its all-time highs.
Since peaking at $488.54 in mid-December, Tesla has shed over $800 billion in market value, prompting several major Wall Street firms, including Bank of America, Goldman Sachs, and Baird to cut their price targets on the company.
Analysts cite multiple concerns: declining vehicle sales, delayed updates on a promised low-cost model, production downtime for the Model Y refresh, and intensifying competition in key markets like China. However, the elephant in the room remains Musk’s political activities and his role leading the Department of Government Efficiency (DOGE) as part of the Trump administration.
“Musk’s involvement with the Trump administration adds uncertainty to the demand-side,” Baird analysts noted. The CEO’s polarizing political statements and posts on X have sparked anti-Tesla sentiment, with protests and suspected acts of vandalism targeting company facilities.
Despite the bearish trend, some analysts remain optimistic. Wedbush Securities added Tesla to its “Best Ideas” list with a $550 price target, arguing that “the best thing that ever happened to Musk and Tesla was Trump in the White House” due to the potential for a deregulatory environment favorable to autonomous driving.
Wedbush analyst Dan Ives expects Tesla to launch a model priced below $35,000 this summer. He believes the company’s autonomous driving technology could ultimately represent 90% of Tesla’s valuation, potentially pushing the company’s market cap past $2 trillion.
Can Tesla Stock Rebound?
Tesla is gearing up for a significant product expansion in 2025, with preparations underway across all factories to launch new, more affordable vehicle models in the first half of 2025. The EV maker has already begun its refreshed Model Y production ramp, with deliveries starting in Q1.
The automaker’s manufacturing footprint continues to grow, with construction of the Semi factory progressing in the U.S. First truck builds are scheduled for late 2025, with volume production beginning in early 2026. Simultaneously, Tesla is preparing Cybercab production lines at Gigafactory Texas, targeting volume production in 2026.
Internationally, Tesla achieved record deliveries in China during Q4, with Model Y becoming the best-selling vehicle in the country for the full year. Model Y was the top-selling vehicle in Europe across multiple countries, including Denmark, Norway, Sweden, Switzerland, and the Netherlands.
On the technology front, Tesla completed the deployment of “Cortex,” a massive AI training cluster with approximately 50,000 Nvidia (NVDA) H100 GPUs at Gigafactory Texas. This infrastructure supported the release of FSD (Supervised) V13, which significantly improves safety and comfort through increased data processing capabilities and reduced latency.
Tesla’s energy business saw record deployments for Powerwall and Megapack at a combined 11.0 GWh in Q4, resulting in record gross profit. The newly completed Shanghai Megafactory will ramp production in Q1 to address continued strong demand.
What’s Next for TSLA Stock?
Tesla expects vehicle business growth in 2025, with the rate dependent on autonomy advancements, factory production ramps, and the broader economic environment. Energy storage deployments are projected to grow at least 50% year-over-year.
Notably, Tesla has adjusted its approach for new vehicles, which “will utilize aspects of the next generation platform as well as aspects of our current platforms” to achieve more capital-efficient growth.
While this approach results in less cost reduction than previously expected, it should enable the company to reach nearly 3 million vehicles in annual production capacity, representing over 60% growth from 2024 levels.
Investors are worried about Tesla’s narrowing profit margins. For instance, it ended 2024 with gross margins of 17.9%, compared to 25.6% in 2022. Its operating margins have also narrowed from 16.8% to 7.8% over the last two years.
Analysts expect Tesla’s adjusted earnings per share to expand from $2.42 in 2024 to $2.85 in 2025. So, priced at 78.9x forward earnings, TSLA remains overvalued despite the ongoing drawdown.
Out of the 40 analysts covering Tesla stock, 14 recommend “Strong Buy,” three recommend “Moderate Buy,” 13 recommend “Hold,” and 10 recommend “Strong Sell.” The average target price for TSLA stock is $352.71, indicating upside potential of over 54% from current levels.
