San Francisco, USA – The electric car company Tesla has been facing a significant downturn in its market capitalization, with around 48% of its value disappearing in just a few months. This decline is attributed to a combination of dwindling sales and concerns surrounding the company’s leadership, particularly its CEO Elon Musk.
Analysts at JPMorgan commented that they have not witnessed a comparable situation in the history of the automotive industry. The rapid loss in Tesla’s value has left experts struggling to find a similar case, even pointing out that previous instances with Japanese and Korean car brands losing sales were confined to specific markets, unlike Tesla’s global decline.
In response to the deteriorating situation, JPMorgan analysts slashed their price target for Tesla by approximately 41%, from $230.58 to $135. They also revised down their expectations for vehicle deliveries in the first quarter of 2025 to around 355,000 units, marking an 8% decrease compared to the same period in the previous year.
The downward spiral of Tesla’s market cap has been striking, plunging nearly 49% between December and Wednesday after trading hours. The company, which reached a peak value of $1.54 trillion by the end of last year, has now dropped to around $777 billion. This nosedive coincides with Tesla experiencing a decline in sales worldwide, along with branding issues linked to Elon Musk’s political affiliations.
The complications surrounding Musk’s alignment with the Trump administration have cast a shadow over Tesla’s prospects. Analysts have noted potential challenges in demand due to Musk’s involvement in government affairs, resulting in negative impacts on Tesla’s sales. The CEO’s recent acquisition of X, the social media platform formerly known as Twitter, has also raised concerns about distractions from Tesla’s core operations.
Despite these setbacks, Tesla retains its position as the most valuable car company globally, surpassing legacy automaker Toyota with a market capitalization of $292 billion. Analysts at Morgan Stanley have identified upcoming catalysts for Tesla, including the launch of a robotaxi in Austin this summer and a demonstration of Optimus, a humanoid robot, by the end of the year. However, uncertainties linger over Tesla’s delivery timelines given Musk’s track record of missing deadlines.