Dan Ives, who has been a longtime bull on Tesla at Wedbush Securities, lowered his 12-month price target for the automaker’s shares by 43%, to $315 from $550. The move is an acknowledgment of increasing worries about the effect of recent tariff implementations and the changing public image of Tesla’s brand, especially in terms of CEO Elon Musk’s political activity.
The recent imposition of high tariffs by the administration of President Donald Trump has added new hurdles for Tesla. A general tariff of 10% on all imports has been set, with additional rates for specific trade partners, including China. China’s retaliatory measure of a 34% tariff on U.S. products further complicates the situation.
While Tesla produces a major part of its cars in the United States, it depends to a great extent on imported parts, such as batteries. The added expense due to such tariffs is likely to influence Tesla’s cost of production and pricing models.
The increased trade tensions could have a negative influence on Tesla’s market share in China, an extremely important area for its development. Chinese buyers may shift to local electric car makers such as BYD, Nio, and Xpeng, which could cut into Tesla’s sales in the region.
Brand Perception and Political Associations
Elon Musk’s direct engagement with the Trump administration, especially via his membership in the Department of Government Efficiency (DOGE), has placed Tesla in a politically charged environment. This identification has provoked polarized popular opinions, whereby some customers perceive the company from a political perspective.
Ives points out that Tesla “essentially has become a political symbol worldwide,” a phenomenon whose potential is that it may offend parts of its potential clientele base. The analyst approximates Tesla has lost not less than 10% of its potential customers worldwide because of these brand woes, an approximation he finds moderate.
Recent Performance and Analyst Expectations
Tesla’s share price has seen a significant fall, declining by around 37% since the start of the year and more than 50% from its December 2024 high. The firm’s first-quarter deliveries in 2025 were around 336,700 units, a 13% drop from the same quarter last year. These numbers highlight the operational and market issues that Tesla is dealing with at present.
While these challenges stand in the way, Ives has an “outperform” rating for Tesla, reflecting confidence in the firm’s long-term prospects. Yet he insists that Musk must “step up, read the room, and be a leader in this time of uncertainty,” implying that strategic changes are essential for winning through the current situation.
The confluence of tariff-induced financial pressures and the complexities arising from political associations presents a multifaceted challenge for Tesla. The substantial reduction in the stock’s price target by a prominent analyst reflects these concerns. Moving forward, Tesla’s ability to address production cost increases, maintain its global market share, and manage brand perception will be pivotal in determining its trajectory in an increasingly complex and competitive environment.
