The company reduced Tesla's delivery projection by 20%, indicating that the stock might further decline to as low as $120 per share over time.
- The Tesla share price has rebounded approximately 7% after experiencing a significant decline earlier in the week. Nonetheless, it remains roughly 50% below its peak value reached on December 17.
- JPMorgan forecasts that Tesla will deliver approximately 355,000 vehicles, which represents a 20% decrease from their initial projection of 444,000.
- The company believes that the price of Tesla shares will ultimately fall to $120 per share.
I believe everyone connected to the automotive sector feels somewhat exhausted due to the continuous alterations that have become characteristic of the current Trump administration. Many of these modifications appear to stem from Elon Musk’s influence, whether directly through President Donald Trump or indirectly through his unofficial network often associated with Dogecoin culture.
These changes are not particularly favored by the typical customers who usually buy Tesla vehicles , and so, it appears that Musk and Tesla must face their challenges once more. This week, JP Morgan delivered an unfavorable forecast for the brand, predicting that this would mark Tesla’s poorest delivery performance in three years.
JPMorgan specifically reduced Tesla’s delivery estimate by 20%, lowering it to 355,000 vehicles from an earlier analyst prediction of 444,000. This initial forecast was slightly above the consensus of around 430,000 units held by many others in the industry. Additionally, they believe that Tesla’s stock price could drop significantly further, potentially reaching as low as $120 per share, which would be roughly half of its current value.
Several factors account for this situation. Firstly, the Trump administration's actions played a role. reckless assault on the U.S. market through tariff measures has done nothing but harm automobile manufacturers, including Tesla. Nobody can predict the exact tariffs that automobile manufacturers and their related suppliers might ultimately face. Currently, they may encounter none at all. However, should Canada, Mexico, the European Union, or China inadvertently provoke President Trump in some manner, those tariffs would likely come into play. That isn’t beneficial for any operational company aiming to strategize for tomorrow.
Furthermore, Elon Musk’s activities on the political right, particularly his involvement with X (formerly known as Twitter) and in real-world politics, can no longer be overlooked. What began as provocative posts on social media has escalated to a significant impact on international politics. Many minorities and individuals who do not align with the right wing view this influence as potentially harmful. In a recent instance, he outright referred to Canada as “not a real country,” which fuels an increasingly contentious debate. For the incorporation of the country located to the north of America. This has only encouraged Canadians (as well as people worldwide) to boycott the company.
Furthermore, sales have begun to plummet across much of Europe. The sales in the Chinese market remain robust; however, this will not suffice to maintain that pace. Additionally, numerous Chinese brands have been eroding Tesla’s market share. something even the New York Times covered this week .
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Additionally, the vehicles are somewhat outdated. While the Model 3 and Model Y might have received updates, with the latter being refreshed relatively recently, they remain largely similar to their predecessors. Combine this with Musk’s conduct, along with factors like inflation and elevated interest rates, and Tesla faces an ideal combination of challenges leading to lower sales.
Tesla's troubles emerged squarely during Q1, which means we likely won't get a clear picture of the extent of the issues until the Q2 figures are published in a couple of weeks. Regardless, things aren't looking promising for Tesla. According to JPMorgan, Tesla’s decline at present "stands unmatched" within the auto industry.
"We find it difficult to recall any similar instance in the history of the automotive sector where a brand has lost such significant value so rapidly," the company stated.
Contact the author: Kevin.Williams@InsideEVs.com
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