Approximately 48% of Tesla’s market capitalization was wiped out by the issue of the month. The decline is drooping in leadership sales and concerns.
Tesla has lost so much value in such a short period of time that JPMorgan analysts say they can’t think of another comparable moment in the history of automobiles.
“We struggle to think of something similar to the history of the automotive industry. The brands lost value very quickly,” they wrote, adding that the closest example was when Japanese and Korean car brands lost sales in 2012 and 2017, respectively, during a “diplomacy conflict” with China.
In a memo at JP Morgan, these historic cases were “confined to a single market, while the decline in Tesla sales in 2025 is not unique to either country or geography,” an analyst at JP Morgan wrote in a memo on Wednesday.
JPMorgan analysts reduced Tesla’s price target by about 41% to $135 from $230.58, and reduced vehicle delivery guidance for the first quarter of 2025 to about 355,000.
After trading hours between December and Wednesday, Tesla lost nearly 49% of its market capitalization, bringing its peak of $1.54 trillion from the end of last year to around $777 billion.
This sharp decline comes as Tesla experiences a global decline in sales and branding issues stemming from CEO politics.
For a while, Elon Musk’s big bet on Donald Trump seemed to have paid off. Tesla was the only EV company that had a surge in stock prices after winning the presidential election in November. The underlying assumption is that if Tesla’s CEO has the ears of the new administration and leads the White House efforts to cut government spending, the mask company can benefit.
That assumption is currently being challenged with the latest guidance from some analysts. This points to the potential demand for Musk’s work with the Trump administration.
“Musk’s work with the Government Efficiency Bureau has proven to be controversial at home, making it uncomfortable for the members on the left, which may make many members of political rights happy, but the impact on Tesla’s sales still seems negative,” a JP Morgan analyst wrote.
Over the past few weeks, Tesla showrooms across the United States have seen protests and a string of vandalism incidents. President Trump has come to the defense of Tesla and said he will consider labeling the perpetrators domestic terrorists.
Outside of the brand’s reputation, some analysts are concerned that Musk’s focus on political issues is to deflect the CEO again from his core business.
“After all, the decline in both Tesla’s pricing and unit volume expectations coincided with the acquisition of X, a social media platform previously known as Twitter,” analysts at JP Morgan said.
Analysts at Morgan Stanley wrote that Tesla stocks fell on Monday due to “sales data, negative brand sentiment and market breaking out,” but they still see the company’s purchase opportunities.
“With stocks falling 50% today, investors’ conversations focus on management distractions, brand degradation and car sales losses,” the analyst said.
A Tesla spokesman did not respond to requests for comment.
Despite the company’s losses, Tesla continues to be the most valuable automotive company in the world.
Tesla’s second is the legacy automaker Toyota. This has a market capitalization of $292 billion.
Analysts at Morgan Stanley said several “catalysts” in the company’s pipeline, including Tesla’s Robotax, are expected to hit Austin Road later this summer, while another Optimus demonstration, the humanoid robot, was expected by the end of the year.
However, given that CEOs have a history they missed, expectations for Tesla’s delivery timeline may have to be eased. deadline.
