Catenaa, Monday, June 09, 2025- Tesla stock was hit by two downgrades on Monday as analysts claim Elon Musk’s electric-vehicle company is facing a highly uncertain political outlook.
“Looking ahead, we are concerned that the war of words between President Trump and Elon Musk, along with expiration of EV credits, could further weaken demand for new Teslas,” wrote analysts at Argus Research, who downgraded the stock to hold from buy.
The stock fell 2.5% on Monday morning, suggesting it will extend its pronounced year-to-date decline. Shares are down about 29% in 2025, making it the weakest performer of the so-called Magnificent Seven stocks.
Tesla stock saw most of its decline recently due to the feud that is blowing up between Musk and US President DonaldTrump. While Musk subsequently suggested he was open to making amends, the tension, especially given Musk’s connection to the administration, is seen as a significant question mark overhanging the shares.
The feud, they added, is emblematic of how the stock “appears to be currently trading on non-fundamental events.” This view was echoed by Baird, which cut the stock to neutral from outperform.
“The recent incident between Musk and President Trump exemplifies key-person risk associated with Musk’s political activities,” analyst Ben Kallo wrote.
“While we have no indication of how the relationship may change or what either will do, we see the situation as adding uncertainty to TSLA’s outlook. Additionally, we believe this may heighten questions regarding brand damage, which we expect will persist until sustained evidence of volume growth avails itself.”
Musk’s comments about Tesla’s robotaxi program “are a bit too optimistic, and we believe this excitement has been priced into shares,” Baird said. The service, which focuses on driverless vehicles and artificial intelligence, is scheduled to launch in Austin this week.
