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Tesla is struggling. One Wall Street analyst sees Red state EV buyers coming to the rescue.

Tesla is struggling. One Wall Street analyst sees Red state EV buyers coming to the rescue.

  • 20.03.2025 16:01
  • businessinsider.com
  • Keywords: Tesla, Wall Street

Tesla's stock struggles in 2025 have been partly linked to Elon Musk's political involvement, but TD Cowen analyst Itay Michaeli predicts that Tesla could gain sales in Red states despite losing ground in Blue regions, potentially offsetting losses and boosting long-term growth.

Tesla NewsTSLAsentiment_dissatisfiedRBCsentiment_dissatisfiedJPM/PJsentiment_dissatisfied

Estimated market influence

Tesla

Tesla

Negativesentiment_dissatisfied
Analyst rating: Neutral

Struggling due to Elon Musk's political involvement affecting sales and stock price.

TD Cowen

Positivesentiment_satisfied
Analyst rating: N/A

Analysts predict Tesla could gain in Red states despite Blue state losses, leading to net sales gains.

Wall Street

Negativesentiment_dissatisfied
Analyst rating: N/A

Overall sentiment towards Tesla is negative with multiple downgrades and price target reductions.

RBC

RBC

Negativesentiment_dissatisfied
Analyst rating: Buy

Downgraded Tesla stock, reflecting negative sentiment on its performance.

JPMorgan

Negativesentiment_dissatisfied
Analyst rating: —

Reduced price target for Tesla due to Musk's political involvement affecting sales.

Cantor Fitzgerald

Positivesentiment_satisfied
Analyst rating: N/A

Upgraded Tesla stock to 'overweight' based on tech developments and expectations for robotaxis and Optimus bot.

Context

Analysis: Tesla's Struggles and Market Implications

Overview

  • Stock Performance: Tesla shares dropped over 50% since December 2024 due to negative headlines and declining sales data.
  • Analyst Sentiment: TD Cowen maintains a "Buy" rating with a price target of $388 per share, while other firms like JPMorgan have downgraded the stock.

Brand Impact

  • Political Divide: Tesla's brand is eroding in Blue counties due to Elon Musk's political involvement, leading to boycotts and vandalism.
  • Red State Growth: EV adoption could rise to 9.7% in Red regions, potentially adding 107,000 units in sales for Tesla.

Competitive Dynamics

  • Market Shift: Competitors like GM, Hyundai, Ford, and Honda may gain market share in Blue counties if Tesla loses 22%-28% of its sales there (equivalent to 105,000 lost units).
  • Analyst Contradictions: While TD Cowen is bullish, JPMorgan notes negative effects on Tesla sales due to Musk's political role.

Market Trends

  • EV Adoption: Red regions show potential for increased EV adoption, offsetting losses in traditional strongholds.
  • Long-Term Growth: Despite near-term challenges (e.g., tough Q1), Tesla could benefit from growth in under-penetrated markets over multiple years.

Regulatory and Strategic Considerations

  • Political Risks: Musk's role in the Trump administration creates significant headwinds for Tesla in Blue regions.
  • Strategic Focus: Competitors are poised to capitalize on Tesla's potential losses, but Tesla's innovation and robotaxi plans remain key strengths.

This analysis highlights the complex interplay of politics, market dynamics, and strategic positioning in shaping Tesla's future.