Tesla's (TSLA) troubles have intensified with the imposition of new economic tariffs by the Trump Administration, further adding to softer Q1 delivery expectations driven by brand damage from its political associations, Wedbush said in a note on Sunday.
Wedbush said while Tesla is less exposed to tariffs than US automakers like GM, Ford, and Stellantis, it still depends on global sources for parts and batteries, including China.
The Trump-era tariffs in China are expected to push Chinese consumers toward domestic brands like BYD, Nio, and Xpeng, disrupting Tesla's demand in a key region, which is crucial for its long-term success, Wedbush added.
The brokerage firms said Tesla has effectively become a political symbol, exacerbating its brand crisis, and estimates the company has lost at least 10% of its potential global customer base due to self-inflicted issues, with the impact in Europe possibly reaching 20%.
Tesla faces a challenging year ahead unless Elon Musk takes a step back, particularly from his involvement with the Department of Government Efficiency, Wedbush said
Wedbush has lowered its price target for Tesla to $315 from $550 but maintained an 'outperform' rating.
Shares of the company fell more than 4% in recent premarket trading Monday.
Price: 229.29, Change: -10.10, Percent Change: -4.11
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