Elon Musk’s flirtation with far-right politics continues to hurt Tesla, with deliveries in what was its biggest European market – Germany – down 70 per cent.
Is Tesla’s darkening outlook fully priced into shares?
Bulls might hope so, given shares are down more than 30 per cent in 2025 and by some 45 per cent since December’s peak. However, that may be optimistic.
Yes, shares have tanked, but they have merely retreated to where they were before November’s presidential election. Donald Trump’s victory ignited what Bank of America calls a “bro bubble”, with cryptocurrencies and shares in speculative stocks such as Tesla and Palantir soaring. That bubble has burst.
Arguably, the market is purging the “bro bubble” premium, rather than solely reacting to Tesla’s recent sales woes. Then again, Tesla shares have long been driven by sentiment and narrative, not fundamentals.
Morgan Stanley’s Adam Jonas has a bullish $430 price target for Tesla. Tesla’s car business accounts for only $86 of this price target, with Jonas more interested in Tesla’s forays into AI, robotics, and how many autonomous taxis Tesla will have on the road in – wait for it – 2040.
Forget about the lousy car sales of today, bulls might say, and focus on the dreams of tomorrow.
