Tesla's stock downgraded amid Musk's fallout with Trump
- Baird analysts reduced their rating on Tesla stock from buy to neutral and lowered the price target by 14%.
- Musk's public clash with Trump has raised concerns about brand damage and skepticism over Tesla's robotaxi rollout.
- The downgrade reflects broader worries about Tesla's sales performance and future prospects amidst political turmoil.
In June 2025, Tesla's stock faced a significant downgrade from Baird analysts in the wake of a public dispute between CEO Elon Musk and former President Donald Trump. The conflict arose after Musk criticized Trump, leading to uncertainty around Tesla’s brand image and future growth potential. The analysts revised their rating for Tesla stock from buy to neutral and lowered their share price target from $370 to $320, citing skepticism about Musk’s ambitious predictions for the rollout of autonomous robotaxis. Musk's ties with Trump were previously viewed positively by investors. However, the recent fallout has complicated this relationship, as evidenced by Trump's harsh remarks and threats over federal support for Musk's businesses. Analysts highlighted the potential for brand damage due to Musk's political activities and the public perception they create. Baird's report noted that the predicted deployment of just 6,000 driverless cabs was significantly lower than Musk's earlier claims of hundreds of thousands, further contributing to the downgrade. Tesla's strong performance post-Election Day, buoyed by Musk's previous affiliation with Trump, has come under scrutiny due to observed weaknesses in vehicle sales and financial performance. The company experienced its worst-ever growth in first-quarter vehicle deliveries, and revenues hit their lowest point since mid-2022. Analysts have associated Musk's political donations—approximately $288 million to Trump's campaign and related efforts—with a slump in sales particularly in Democratic-leaning regions. Consequently, Goldman Sachs anticipated a further 18% decline in vehicle deliveries for the current quarter compared to the previous year. While some analysts remain bullish on Tesla’s long-term potential, the immediate outlook appears uncertain. The potential rollback of government support for electric vehicles and autonomous driving initiatives could further impact Musk’s plans for Tesla. The public dispute highlights the riskiness of Musk's political affiliations and how they may influence Tesla’s market standing and future growth as the situation develops further. Wells Fargo and Wedbush analysts maintain confidence in Tesla’s future but emphasize the importance of resolving political tensions for the company’s success.