Tesla's Longest Decline Amid Musk's Washington Role

0

Wall Street's response to this decline has been tangible, with major firms such as Bank of America, Baird, and Goldman Sachs reducing their price targets for Tesla. Bank of America's analysts highlighted falling new vehicle sales and the absence of updates on a potential low-cost model as significant concerns, reducing their target from $US490 to $US380. Similarly, Goldman Sachs revised their price target from $US345 to $US320, citing dropping electric vehicle sales in critical markets, including Europe, China, and the US.

The competitive landscape for Tesla, especially in China regarding its Full Self-Driving (FSD) feature, appears to be another pressure point. This partially automated system is sold as a premium option in the US, while competitors in China offer similar smart driving technologies without additional software costs.

The decline in Tesla's stock and the shifting business dynamics underscore the broader challenges the company faces in maintaining its market position. Musk's political involvement and the partnerships he forms in Washington could imply uncertainties affecting the company's consumer demand and investor confidence. Additionally, Musk's affiliation with the Trump administration, coupled with his polarizing public statements, may contribute to rising anti-Musk and anti-Tesla sentiments, evident through protests and vandalism at Tesla facilities in both the US and Europe.

These developments come at a pivotal moment when Tesla needs to strategically navigate production adjustments for its new Model Y SUV and counterbalance Musk's controversial public persona, which could adversely impact the brand's public perception and products' desirability.

Looking forward, the implications for Tesla could be multifaceted. Investor focus might shift further from Musk's political involvements to Tesla's core business metrics and competitive positioning. Moreover, proposals for Musk's dismissal as CEO, as put forth by publications like Cleantechnica, could gather more traction if public sentiment continues to skew negatively.

Despite the market collapse, there are still optimistic outlooks, with Wedbush Securities recognizing this downturn as a strategic buying opportunity, adding Tesla to its "Best Ideas" list and setting a 12-month price target at $US550. The situation presents a "gut check moment" for Musk's supporters and investors, as termed by Wedbush's Dan Ives, necessitating a recalibration of expectations and a re-evaluation of Tesla's trajectory amidst the global shift in sentiment.

Published:Monday, 10th Mar 2025
Source: Paige Estritori

Share this news item:

Finance News

Clear

Talaria Partners with Equity Trustees for Global Fund Oversight 01 Apr 2025: Paige Estritori Talaria Asset Management, a boutique investment firm based in Australia, has selected Equity Trustees as the responsible entity for its suite of three global equity funds. The decision encompasses the Talaria Global Equity Fund Complex ETF (TLRA), the Currency Hedged Complex ETF (TLRH), and the Foundation units. This partnership entrusts Equity Trustees with the responsibility of ensuring these funds meet necessary regulatory and compliance standards. - read more

Australian Inflation Eases, Indicating RBA Rate Cuts May Follow 01 Apr 2025: Paige Estritori Recent data reveals a continued decline in Australian inflation, providing optimism for the financial sector. The Australian Bureau of Statistics (ABS) and the Melbourne Institute (MI) both reported lower-than-expected inflation rates, with the MI’s trimmed mean inflation reaching its lowest since 2020. This trend, highlighted by Justin Fabo of Antipodean Macro, indicates a return towards pre-2003 averages. - read more

Powerful Advice Platforms Set to Redefine Australian Financial Planning 28 Mar 2025: Paige Estritori Advice platforms are emerging as a transformative force in Australia's financial planning sector, according to insights shared at the Financial Newswire’s Advice, Wealth and Super: Rewired 2025 Conference. Industry leaders predict these platforms will leverage their substantial scale and purchasing power to secure better pricing from fund managers, reshaping the landscape of financial services. - read more

Sydney Beer Co's Financial Collapse Leaves $10 Million Debt 28 Mar 2025: Paige Estritori Brett Lee's Sydney Beer Co, co-owned with Matt Nable, faces financial turmoil, owing nearly $10 million to over 60 creditors. Even the Australian Taxation Office and the McGrath Foundation, founded by Lee's cricket teammate Glenn McGrath, are on the list of those affected. The company appointed RSM Australia as administrators following unsuccessful expansion efforts into the US just six months after raising $6 million. - read more

Cost of Financial Advice and Client Retention Challenges Revealed 27 Mar 2025: Paige Estritori Recent findings by Netwealth indicate that the cost of financial advisory services is a significant factor for nearly half of clients discontinuing their adviser relationships. Specifically, 43% of former advised clients cite high costs as a primary concern, especially when they perceive inadequate value for complex financial situations. - read more

Monthly CPI Falls Short Again as Key Components Decline 26 Mar 2025: Paige Estritori A recent release by the Australian Bureau of Statistics (ABS) indicates that the monthly Consumer Price Index (CPI) is underwhelming expectations once more. The seasonally adjusted CPI increased by 2.4%, while the CPI excluding volatile items like holiday travel posted a 2.7% rise. Similarly, the annual trimmed mean registered a 2.7% uptick. - read more