Electric vehicle (EV) maker Tesla (TSLA) stock declined over 7% on Thursday over concerns of escalating tariffs and softening demand in key markets. Several analysts have revised their estimates downwards in recent times. Yesterday, Mizuho Securities analyst Vijay Rakesh cut his price target for Tesla from $430 to $375, pointing to worries about how new tariffs could affect the auto sector.
Still, Rakesh remains upbeat on Tesla’s outlook and kept an Outperform rating, highlighting the company’s strong lead in the U.S. electric vehicle market.
Tariffs Drive Cost Concerns
Trump’s 25% auto tariffs, which took effect on April 3, are likely to raise costs for U.S. carmakers by around $108 billion in 2025, based on a study by the Center for Automotive Research. Some analysts also say the tariffs could increase the price of an average car by about $5,000, which might hurt demand from buyers.
Building on that concern, Mizuho pointed out that Trump’s 90-day tariff pause announced on Wednesday doesn’t apply to autos or auto parts. This means the auto industry is still facing plenty of uncertainty. The firm estimates that these tariffs could lower Tesla’s earnings per share by around $0.08, or roughly 3%. That impact could be even greater if the U.S. raises tariffs on batteries and materials coming from China.
Mizuho also warned that higher car prices might hurt consumer demand, which would weigh on overall sales. On top of that, Mizuho said rising production from competitors in China and Europe could put more pressure on Tesla’s market share.
Wall Street Analysts Cut Tesla Forecasts
Rakesh lowered his estimates for Tesla’s revenue, earnings, and vehicle deliveries over the next few years. For the first quarter of fiscal 2025, he now expects revenue of $20.53 billion and earnings per share of $0.51, down from his earlier forecast of $22.30 billion and $0.57. Meanwhile, for the full year 2025, Rakesh reduced his estimates from $108.03 billion in revenue and $2.89 in EPS to $101.03 billion and $2.60, respectively. Also, expected vehicle deliveries were cut from 1.82 million to 1.66 million.
Looking ahead, he cut his 2026 forecast from $134.25 billion in revenue and $3.87 EPS to $124.33 billion and $3.60 EPS. He also lowered expected vehicle deliveries from 2.30 million to 2.00 million units. For 2027, he trimmed his estimates from $159.98 billion in revenue and $4.99 EPS to $149.81 billion and $4.70 EPS, with deliveries reduced from 2.73 million to 2.43 million.
Other banks have also shared the same view. UBS analyst Joseph Spak lowered his price target to $190 and kept a Sell rating. Meanwhile, Goldman Sachs trimmed its target to $260, pointing to a weak economy and rising competition in the EV market.
Is Tesla Stock a Good Buy Now?
Overall, TSLA stock has a Hold consensus rating on TipRanks, based on 16 Buys, 11 Holds, and 11 Sell ratings. Also, the average Tesla price target of $307.75 implies 21.93% upside potential from current levels. Year-to-date, Tesla stock has lost over 37.5%.
