Tesla Stock Slumps Again As Analysts Warn Of Sales Woes

Tesla, the electric vehicle giant led by the world’s richest man, Elon Musk, is off to a rocky start this week. On Monday, Tesla shares fell nearly 5% to $238, even as the broader market showed signs of recovery. The S&P 500 gained 0.7%, continuing its rebound after a recent correction, but Tesla was the worst-performing stock among the 100 largest companies in the index.

Wall Street Loses Confidence

The sharp decline comes on the heels of another warning from Wall Street. Mizuho analysts, led by Vijay Rakesh, slashed their price target for Tesla by $85 to $430 and lowered their 2025 vehicle delivery forecast from 2.3 million units to 1.8 million. This more than 20% cut significantly undercuts the market consensus of 2 million deliveries. According to Rakesh, Tesla’s sales struggles stem from weakening brand perception in both the U.S. and Europe, geopolitical tensions, and fierce competition in China from domestic EV makers.

Sales Numbers Tell the Story

Tesla’s recent sales figures paint a sobering picture. In the U.S., Tesla’s sales declined 2% year-over-year in a market where overall EV sales rose by 16%. The situation is more severe overseas. Tesla’s China sales plummeted by 49%, despite an 85% increase in overall EV sales in that country. In Germany, the company’s sales dropped a staggering 76% while the market itself grew by 31%.

A Brand in Decline?

Tesla shares have now fallen 41% year-to-date, making it the second-worst performer in the S&P 500. Mizuho’s downgrade adds to a growing list of major institutions, including Goldman Sachs, JPMorgan, and UBS, that have lowered expectations for Tesla. Some analysts are beginning to question whether the company’s once-legendary brand value is rapidly eroding. JPMorgan analysts recently noted, “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.”

Politics and Perception

Musk’s increasing involvement in politics may also be taking a toll. In Europe, particularly Germany, Tesla’s declining perception is partly attributed to Musk’s political positioning and controversial statements. Though once seen as a symbol of innovation and progress, Tesla now finds itself caught in geopolitical crossfires and trade tensions. Notably, Tesla recently lobbied the Trump administration to adopt a phased approach to tariffs, acknowledging that certain parts and components essential to Tesla’s production are difficult or impossible to source within the U.S.

A CNN poll published last week further highlights the shifting public sentiment, with 53% of respondents holding a negative view of Musk compared to only 35% with a positive view.

What’s Next for Tesla?

Tesla has faced downturns before, but the current combination of sales struggles, brand perception challenges, and geopolitical complexities is unprecedented. While some analysts, like Mizuho’s Rakesh, remain cautiously optimistic with bullish long-term price targets, others are questioning whether Tesla can regain its footing.

For investors, the question remains: Is this a temporary slump or the beginning of a longer-term decline for Tesla’s dominance in the EV market? Only time will tell, but for now, the road ahead looks bumpy.

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