Topline
This will be Tesla’s weakest quarter for car deliveries since 2022, according to JPMorgan analysts, as the polarizing, powerful role of Tesla boss Elon Musk in President Donald Trump’s administration increasingly weighs on Tesla in the eyes of Wall Street.
Donald Trump, right, and Tesla CEO Elon Musk speak to the press Tuesday as they stand next to a … [+]
AFP via Getty ImagesKey Facts
In a Wednesday note to clients, the JPMorgan group led by Ryan Brinkman lowered its forecast for Tesla’s first-quarter deliveries by 20% from 444,000 to 355,000, significantly below the consensus analyst projection of 430,000, according to FactSet.
JPMorgan’s prediction calls for Tesla’s lowest deliveries since 2022’s third quarter and an 8% decline from 2024’s first quarter.
The negative shift comes as Tesla faces the “acute” effects of Musk’s “more divisive new role in government,” explained Brinkman, alluding to Musk’s role as the head of the Department of Government Efficiency (DOGE).
Tesla sales in Europe are “under far greater pressure than at home as a consequence of statements by Musk pertaining to the war in Ukraine, U.S. participation in NATO, and far-right political parties,” Brinkman added, as new Tesla vehicle registrations cratered 50% year-over-year in January.
And “Tesla appears to have the most to lose” among American car companies from the “shifting regulatory backdrop” under Trump, according to the analysts, citing the potential rollback of electric vehicle tax credits which could further cut into demand for Teslas.
JPMorgan’s $120 share price target for Musk’s company is the lowest on Wall Street, according to FactSet data, and it implies more than 50% downside from Tesla’s $248 ticker Wednesday.
Crucial Quote
“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,” wrote the JPMorgan analysts.
Contra
The bearish JPMorgan update came as the badly battered Tesla stock enjoyed a rebound, gaining 7.6%. Its best daily percentage gain since January, Tesla stock led a broader rally across technology stocks as tamer-than-expected inflation data restored some investor confidence. Shares of Tesla are still down 39% year-to-date, the second-worst loss of any company listed on the S&P 500, and 48% from their December all-time high.
Big Number
53%. That’s the proportion of Americans who hold a negative view on Musk, according to a CNN poll released Wednesday, compared to 35% who hold a positive opinion and 11% who have no view.
Key Background
JPMorgan is the latest major firm to cut its Q1 delivery forecasts for Tesla, joining the likes of Goldman Sachs and UBS. Tesla stock initially enjoyed a significant bump after Trump’s victory, which brought a close Musk ally to power, as shares gained as much as 91% from Election Day through December, before cratering as investors keyed into the potential negative impact of Musk’s controversial White House role and Trump’s tariffs weighed on the market.
Forbes Valuation
Musk is still by far the richest person in the world with a $333.8 billion net worth, according to our latest estimates, though that’s nearly $130 billion below his fortune’s peak in December. Tesla is the primary source of Musk’s wealth, though he also holds multibillion-dollar stakes in his private companies SpaceX, X and xAI.
Further Reading
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