It’s not every day that a top Wall Street bull turns bearish on its favourite stock.
But Wedbush has taken a knife to its long-standing Tesla Inc (NASDAQ:TSLA) optimism, cutting the electric carmaker’s price target from $550 to $315.
The reasons? A perfect storm of self-inflicted brand damage and the sweeping global tariffs introduced by Donald Trump’s administration.
Tesla, the once-untouchable EV juggernaut, is now navigating choppy political waters, some of which, analysts say, Elon Musk stirred himself.
Wedbush’s Daniel Ives, a longtime supporter of the company, wrote that Tesla is suffering from a “brand crisis tornado that has now turned into an F5”.
He estimates the company may have lost as much as 10% of its global customer base (possibly more in Europe) due to Musk’s public political alignment.
This included a controversial but short-lived tenure at the Department of Government Efficiency, along with an unfortunate gesticulation 'quenelle' gesture at a rally celebrating Trump's second inauguration.
Tellingly, the association with the Trump Whitehouse will not have played well in China, where Tesla has a major factory and a lucrative market.
As Trump’s tariffs hit Chinese exports, consumer sentiment there is shifting toward domestic champions like BYD and Nio.
“The backlash from Trump tariff policies in China and Musk’s association will be hard to understate,” Wedbush warned. Tesla, it argues, has become a political symbol...and not in a good way.
The numbers are already showing cracks. First-quarter deliveries were down. Revenue forecasts for 2025 and 2026 have been cut.
And now, Tesla is facing higher costs thanks to tariffs on imported parts and batteries, many of which come from China. If those costs are passed on to consumers, analysts fear demand could take another hit.
Meanwhile, protests at Tesla showrooms and reports of vandalised cars in some cities point to reputational damage that is, in Wedbush’s view, "real and accelerating." It’s an uncomfortable shift for a brand once synonymous with innovation and clean tech cool.
Wedbush still rates Tesla as 'outperform', a nod to its long-term belief in the company’s technology, especially in autonomous driving and robotics.
But it’s clear the shine has dulled. “This may be one of Musk’s biggest challenges yet,” the note concludes. And this time, it might take more than a new product launch or a viral tweet to fix it.
Year to date, Tesla shares tanked 37%, valuing the group, which was part of the 'trillion dollar club' at a cut price $750 billion.
Tesla shares were down 2% by Monday afternoon.