March 12, 2025 | By FlashpointNews Team
Tesla’s stock (TSLA) saw a significant rise on Wednesday, despite two major price-target cuts and slashed earnings and delivery estimates by analysts. The electric vehicle (EV) giant is facing challenges, including weak demand, a tarnished brand image, and growing skepticism about its self-driving technology. However, a promotional event hosted by President Donald Trump at the White House provided a temporary boost to the stock.
Price-Target Cuts and Delivery Estimates
Analysts from Evercore ISI and Guggenheim have lowered their price targets for Tesla, citing concerns about declining demand and the company’s ability to meet delivery goals.
- Evercore ISI: Cut its price target to **235∗∗from235∗∗from275, maintaining an “In Line” rating. The firm also reduced its full-year delivery estimate to 1.75 million vehicles, slightly below 2024’s total of 1,789,226.
- Guggenheim: Lowered its price target to **170∗∗from170∗∗from175, maintaining a “Sell” rating. The firm expects first-quarter deliveries to be a “sizable miss,” slashing its estimate to 358,000 from 405,000.
Overall, analysts predict Tesla will deliver 430,000 vehicles in Q1 2025, down from Q4 2024’s record of 462,890. For the full year, the consensus estimate is 1.987 million deliveries, but the trend is heading lower.
Brand Image and Political Backlash
Tesla’s brand has suffered globally due to CEO Elon Musk’s involvement with the Trump administration and his controversial political posts. Musk’s alignment with Trump and his comments on issues like Ukraine have alienated many of Tesla’s traditional customers in the U.S. and Europe.
Analyst Chris McNally of Evercore ISI described the situation as “brand destruction,” noting that Tesla’s image is increasingly polarizing.
Self-Driving and Product Line Concerns
Tesla’s Full Self-Driving (FSD) technology is also under scrutiny. Despite Musk’s claims that Tesla will launch unsupervised robotaxi service in Austin, Texas, by June 2025, data from the FSD Community Tracker shows “little improvement” in miles per disengagement.
Additionally, there are growing doubts about Tesla’s ability to expand its product lineup. A more affordable EV is expected to enter production midyear, but Tesla has yet to release any images or details. Investors worry it may only be a cheaper, stripped-down version of the Model Y.
Financial Challenges
Tesla’s financial outlook is also under pressure. Analysts expect Q1 2025 earnings to be flat at 45 cents per share, with revenue rising marginally to $21.571 billion. Guggenheim analyst Ronald Jewsikow warned that Tesla could start “bleeding cash” if it continues to reduce prices to stimulate demand.
The Trump Bump
On Tuesday, President Trump held a promotional event outside the White House, where he announced he would buy a Tesla to support Elon Musk. The event provided a temporary boost to Tesla’s stock, which rose 7.2% on Wednesday morning.
However, Trump’s endorsement may further polarize Tesla’s customer base. While it could encourage his supporters to buy Teslas, it risks alienating the company’s traditional, more progressive customer base in the U.S. and Europe.
What’s Next for Tesla?
Tesla faces significant challenges in 2025, including:
- Declining Demand: Weak demand and a tarnished brand image could impact sales.
- Self-Driving Skepticism: Growing doubts about FSD technology could hurt investor confidence.
- Financial Pressure: Continued price cuts could lead to negative cash flow.
Despite these hurdles, Tesla remains a leader in the EV market. The company’s ability to navigate these challenges will determine its future trajectory.
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