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Tesla's latest decline could be one for the history books, JPMorgan analysts say

Tesla's latest decline could be one for the history books, JPMorgan analysts say

  • 5 hours ago
  • businessinsider.com
  • Keywords: Tesla, JPMorgan, Elon Musk

Tesla's market value has dropped nearly 49% in recent months, with JPMorgan analysts noting this decline is unprecedented in automotive history. The fall is linked to sagging sales and concerns over Elon Musk's focus on political roles rather than company leadership.

Tesla News

Estimated market influence

Tesla

Tesla

Negative
Analyst rating: Neutral

Market capitalization decline, sales drop, brand issues due to CEO's political involvement.

JPMorgan

Negative
Analyst rating: —

Analysts downgraded Tesla stock and reduced delivery estimates.

Context

Analysis of Tesla's Market Decline and Business Implications

  • Market Capitalization Loss: Tesla lost nearly 49% of its market capitalization between December 2024 and March 2025, dropping from $1.54 trillion to approximately $777 billion.
  • JPMorgan Price Target Cut: JPMorgan analysts reduced their price target for Tesla shares by 41%, from $230.58 to $135.
  • Delivery Estimates Lowered: The firm lowered its vehicle delivery forecast for Q1 2025 to about 355,000 units, representing an 8% year-over-year decrease compared to Q1 2024.
  • Historical Comparison: JPMorgan analysts noted that Tesla's decline is unmatched in automotive history, with the closest analogs being Japanese and Korean brands during diplomatic disputes with China in 2012 and 2017. However, Tesla's decline is broader, affecting multiple regions rather than a single market.
  • Leadership Concerns: Elon Musk's involvement with the Trump administration and his role as CEO of X (formerly Twitter) have raised concerns about his focus on running Tesla effectively.
  • Brand Reputation Issues: Tesla's brand reputation has been impacted by leadership distractions and negative brand sentiment, particularly in the U.S. market where sales are declining.
  • Morgan Stanley Outlook: While Morgan Stanley analysts acknowledge significant challenges, they see a potential buying opportunity for Tesla shares, citing catalysts such as the upcoming Cybertruck launch and humanoid robot developments.
  • Market Position: Despite its decline, Tesla remains the world's most valuable car company, with Toyota holding the second position at a market capitalization of $292 billion.

Long-Term Implications:

  • The sustained focus on political affairs by Elon Musk may divert attention from Tesla's core business operations, potentially affecting innovation and execution.
  • The decline in both pricing and unit volume expectations coincides with leadership distractions, raising questions about the company's strategic direction.
  • While Tesla continues to lead the EV market, its ability to maintain growth and innovation will depend on addressing current challenges and regaining investor confidence.