Tesla (TSLA) stock is off to a poor start this week as the trade war continues to wreak havoc on the global economy.
While many tech stocks are struggling right now, the outlook appears particularly grim for the former electric vehicle (EV) leader. CEO Elon Musk has allowed Tesla’s investors to pay the price for his time with the so-called Department of Government Efficiency (DOGE), which has severely compromised TSLA stock.
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Even before the most recent round of tariffs started fueling speculation of a recession, TSLA stock had been highly volatile and unable to sustain any real momentum. Now, the company faces a highly uncertain future as consumer sentiment towards it continues to trend downward.
It isn’t just investors who are losing faith in Tesla and Musk, though. Wall Street sentiment is shifting and that includes one of the industry’s biggest TSLA stock bulls.
Elon Musk is facing an uncertain future as Wall Street analysts start to scale back their forecasts for Tesla stock.
Marc Piasecki/Getty Images
An analyst who loves Tesla sounds alarm on Musk and tariffs
Anyone who follows Tesla knows that Dan Ives of Wedbush Securities has been highly bullish on the stock for years. Even as the stock trended downward over the past few months, he maintained a highly bullish price target of $550 and maintained his optimism that TSLA would rebound.
On April 6, that finally changed when Ives lowered his Tesla price target. While he’s still bullish, his new target is $315 per share, a significant decrease from $550. Ives had previously admitted that he believed the trade war would significantly impact entire industries and produce no winners but did not lower his price target on Tesla.
Related: Key Tesla investor makes blunt prediction for the company’s future
In a note published on April 6, Ives explained why he blames Musk for creating a brand crisis for Tesla that is severely compromising its growth prospects. He also sees this crisis overshadowing Tesla’s other advancements, which should be positive catalysts.
“The future is so bright for Tesla with Austin’s unsupervised FSD, lower-cost vehicles, and of course the autonomous and robotics future,” he states….:but this is a full blown crisis Tesla is navigating now (along with these tariffs), and it is time for Musk to step up, read the room, and be a leader in this time of uncertainty.”
Ives also highlights the impact of what he describes as an “economic tariff Armageddon.” While he notes that Tesla has lower exposure to tariffs than other automakers such as Ford, (F) General Motors (GM) or Stellantis, (STLA) , he still sees them negatively impacting TSLA stock.
“This will be a clear cost impact to Tesla in the US and ultimately be passed on to consumers with some demand destruction if these tariffs hold in their current form,” he states.
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As Ives sees it, the combination of the brand crisis created by Musk and the tariff crisis created by Trump have created the perfect storm for Tesla, finally prompting him to lower his price target. For someone like Ives, who has been so bullish on TSLA for so long, that probably wasn’t a decision that he made lightly.
There may be darker days ahead for the tech sector but especially for Tesla
Prior to publishing this note, Ives revealed that he believes the tech sector is headed for more declines for as long as the tariffs remain in effect. In an April 4 post on X, he stated, “Dark days ahead for tech until cooler heads prevail.”
Ives isn’t the only analyst who has cited Tesla’s brand damage as a key factor in the company’s grim outlook. JPMorgan (JPM) recently published a bearish note, stating that the recent Tesla deliveries miss can be attributed to public sentiment towards Tesla taking a massive hit recently.
Related: Major Tesla stock bull sounds alarm on major problem facing Elon Musk
Investment Advisor Marcus Sturdivant Sr., founder of ABC Squared, recently spoke to TheStreet about Musk’s future at Tesla and why analysts are becoming increasingly concerned about the company’s future.
“The damage to the brand will take quarters if not years to heal,” he states.” We have seen other American brands make a comeback from similar issues, perhaps not in the entanglement and depth of Tesla now but examples exist of leaders hurting the brand and the company recovering. But as they were not overnight successes, perhaps Tesla’s stock will have to spend some time in the penalty box.”
Sturdivant adds that analysts are also likely concerned with Musk being spread extremely thin in his commitments, a factor that has certainly harmed Tesla stock recently.
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
