Tesla Slumps as Trump Feud Triggers Pair of Downgrades

• Tesla Inc. (TSLA) shares dropped 2.40% to $288.05 in early trading, contributing to a 27% year-to-date decline in 2025 following downgrades from Argus Research and Baird due to uncertainties tied to Elon Musk’s dispute with President Donald Trump.
• Analysts at Argus and Baird highlighted the feud and potential expiration of EV tax credits as risks to Tesla’s demand, with the stock trading on non-fundamental events and fewer than half of Bloomberg-tracked analysts recommending a ‘Buy.’
• Baird also noted that optimism around Tesla’s robotaxi program, set to launch in Austin, may be overpriced in the shares, adding to concerns about brand damage and the need for sustained volume growth.

Tesla Inc. (TSLA) shares fell 2.40% to $288.05 in early trading on Monday, reflecting growing investor concerns about the company’s outlook, as reported by Bloomberg. The decline follows downgrades from Argus Research and Baird, with analysts citing heightened uncertainty driven by a public dispute between CEO Elon Musk and President Donald Trump, alongside the potential expiration of electric vehicle tax credits. The stock’s drop contributes to its 27% year-to-date decline in 2025, making Tesla the weakest performer among the Magnificent Seven megacap stocks, despite a brief rally after Trump’s reelection that peaked in December.

The feud between Musk and Trump has introduced significant non-fundamental risks, with Argus Research downgrading Tesla to ‘Hold’ from ‘Buy,’ warning that the conflict could dampen demand for Tesla vehicles. Baird, cutting its rating to ‘Neutral’ from ‘Outperform,’ highlighted Musk’s political activities as a key-person risk, potentially exacerbating brand damage and adding uncertainty to Tesla’s trajectory until consistent volume growth emerges. Both firms, as reported by B’berg, noted that Tesla’s stock appears to be driven by external events rather than core business fundamentals, a sentiment echoed by Wall Street’s skepticism, with fewer than half of Bloomberg-tracked analysts recommending a ‘Buy,’ and the stock trading in line with their average price target, signaling limited expectations for a near-term recovery.

Compounding these challenges, Baird expressed caution about Musk’s optimistic projections for Tesla’s robotaxi program, set to launch in Austin this week, suggesting that excitement around the driverless vehicle initiative may already be priced into the shares. The robotaxi service, a cornerstone of Tesla’s push into artificial intelligence and autonomous driving, is seen as a long-term growth driver, but analysts remain wary of its immediate impact given the company’s broader challenges. Tesla’s market position remains under scrutiny as it navigates political headwinds, competitive pressures in the electric vehicle sector, and the need to demonstrate sustained demand growth to restore investor confidence.

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