Tesla (NASDAQ:TSLA) stock is feeling the heat in 2025, sinking 33% as investor worries mount. Concerns over elevated valuations, escalating global trade tensions, and slowing EV sales and deliveries have all taken a toll, dragging shares lower.
Yet, for Tesla evangelists, the future still holds sparks of promise. Optimists are looking to the firm’s revamped Model Y – currently beginning deliveries in the U.S. – which could help Tesla’s sagging EV sales. Beyond that, Tesla’s ambitions extend well past electric cars, with Elon Musk doubling down on his vision of robots and robotaxis hitting the market in the quarters ahead.
Ultimately, Tesla isn’t just a car manufacturer – it’s a bet on the future. And for believers, that future still hinges on Musk’s knack for selling grand visions and sustaining the hype.
Therein lies the rub, asserts investor Daniel Jones, who argues that Musk’s extracurricular activities have at this point turned him into more of a liability than an asset.
“Elon Musk’s political actions, particularly his support for far-right causes, are alienating customers in Europe, negatively impacting Tesla’s sales and reputation,” the 5-star investor noted.
Jones cites statistics that demonstrate the high unfavourability ratings of the Tesla CEO, such as the fact that 71% of Germans and Brits have a negative view of Musk. In the U.S., Tesla’s largest market, only 39% of Americans have a positive view of him.
Beyond the growing controversy surrounding Musk, Jones contends that TSLA’s lofty valuation multiples leave the stock especially vulnerable to further corrections – much like the one currently unfolding. The investor also pushes back against the notion that Tesla still deserves a premium as America’s EV leader, pointing to its steadily declining U.S. market share, which has shrunk from 74.8% in Q1 2022 to just 44.4% in Q4 2024.
“With market share already falling prior to all of this drama, alienating a majority of the population risks sending sales lower or resulting in slow sales growth as competition heats up,” Jones added.
Already swimming upstream in the tough macroeconomic environment, Jones predicts that Tesla will be the worst performer – “by a rather significant margin” – of all the Magnificent 7 firms. The investor therefore rates Tesla shares a Strong Sell. (To watch Daniel Jones’ track record, click here)
Meanwhile, Wall Street hasn’t quite decided where it stands on Tesla these days. With 13 Buy, 12 Hold, and 10 Sell ratings, TSLA holds a consensus Hold (i.e. Neutral) rating. Its 12-month average price target of $347.59 implies a potential upside of ~27%. (See TSLA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.