Tesla’s recent market downturn has caught the attention of industry analysts, with JPMorgan stating they could not find “anything analogous in the history of the automotive industry,” Business Insider reports.
In just a few months, nearly 48% of Tesla’s market capitalization has been erased, a decline attributed to falling sales and concerns over CEO Elon Musk’s leadership.
Between December 2024 and early 2025, Tesla’s valuation fell from a peak of $1.54 trillion to approximately $777 billion. JPMorgan analysts noted that while other automakers have faced steep losses before, those declines were often tied to regional crises, such as Japanese and Korean brands losing sales due to diplomatic tensions with China in 2012 and 2017. In contrast, Tesla’s decline has been widespread and global.
As a result, JPMorgan has lowered its price target on Tesla by about 41%, cutting its estimate from $230.58 per share to $135. The firm also revised its first-quarter 2025 vehicle delivery forecast to 355,000 units—an 8% year-over-year decrease from 2024.
Tesla’s struggles are not limited to stock performance. The company is facing growing concerns over brand perception, which analysts say has been affected by Musk’s political involvement. Initially, Tesla was the only electric vehicle (EV) company to see its stock rise after Donald Trump’s election victory in November 2024. Investors speculated that Musk’s influence with the administration, particularly in its government efficiency efforts, could benefit Tesla.
However, JPMorgan analysts now suggest that Musk’s work with the Trump administration may be hurting the company instead. They pointed to protests and vandalism at Tesla showrooms across the US in recent weeks, which have sparked controversy. President Trump has publicly defended Tesla, even suggesting that those responsible for the acts of vandalism could be labeled domestic terrorists.
Analysts have also raised concerns about Musk’s divided attention. JPMorgan noted that the decline in Tesla’s sales volume and pricing coincided with Musk’s takeover of X (formerly Twitter), suggesting that his involvement in outside ventures may be impacting Tesla’s performance.
Morgan Stanley analysts echoed similar sentiments, writing in a recent report that Tesla’s decline is tied to “sales data, negative brand sentiment, and market de-grossing.” However, they still see potential for investors, calling the downturn a possible buying opportunity.
Despite the company’s recent struggles, Tesla remains the most valuable automaker in the world, with Toyota ranking second at a market cap of $292 billion.
Morgan Stanley analysts highlighted several upcoming developments that could help Tesla regain momentum. The company is set to launch its robotaxi in Austin later this summer, and another demonstration of Optimus, its humanoid robot, is expected before the end of the year.
However, analysts caution that expectations for these projects should be tempered, as Musk has a history of missing projected timelines.
