JPMorgan says Tesla is about to have a bad time
Tesla model Y top
(Image courtesy Tesla)
Tesla’s stock is up about 7 percent from its recent big drop. The stock is down nearly 50 percent from its high of 17 December. JPMorgan Chase & Co. estimates that Tesla will sell 355,000 units in 2019, down 20% from its original forecast of 444,000. The firm believes that Tesla’s stock will also eventually fall to USD 120 per share. I think that anyone who is involved in the automotive industry in any way has become a little tired of the constant changes brought about by the second Trump administration. A lot of these changes seem to be at the behest of Elon Musk himself, either directly through President Donald Trump or via his DOGE para-government apparatus.
These changes aren’t exactly popular amongst the base that would normally purchase Tesla vehicles, and thus, it seems like it is once again time for Musk and Tesla to pay the piper. JPMorgan made a bad prediction this week for Tesla: This will be the lowest result in deliveries for three years.
Specifically, JPMorgan cut Tesla’s delivery forecast down by 20 percent to 355,000 units, down from the initial analyst projection of 444,000. The initial forecast was already slightly higher than the consensus of 430,000 units among most other analysts in this field. The firm also believes that Tesla’s share price still has a way to go. It could reach USD 120 or half what it is currently. There are many reasons why this is the case. The Trump administration’s savage tariffs have hurt all car companies including Tesla. Who knows what tariffs the car companies, and their suppliers, will face in the future. It could be anything today. Tariffs will be imposed if Canada or Mexico, the European Union, China, or the European Union in anyway insult Trump. This is not good for any company who wants to plan the future.
Donald Trump issues executive orders temporarily suspending tariffs on trade between Canada and Mexico.
Elon Musk’s right-wing activities on X, formerly Twitter, and in real life politics are now unavoidable. His words and speeches have gone beyond simple inflammatory tweets and are now influencing global politics. Any minority or non right-wing person will often perceive his influence as dangerous. He straight up called Canada “not a real country,” feeding into the growing not-a-call-but-actually-a-call for the annexation of America’s neighbor to the north. That’s only emboldened Canadians (and others across the globe) to boycott the brand.
Moreover, sales have started to collapse in much of Europe. Although the Chinese market is still relatively strong, it won’t last. The New York Times reported this week that many Chinese brands are eroding Tesla’s share of the market.
Also, the cars look a bit old. Model 3 and Model Y have both been updated. The latter more recently. But they are not that different from the cars they replace. Add in Musk’s behavior, inflation and high interest rates and Tesla has the perfect storm for reduced sales.
Tesla’s woes have come out right in the middle of Q1, so we probably won’t know for sure what the damage is until Q2 numbers are released in a few weeks. It’s not good news for Tesla. JPMorgan claims that Tesla’s current fall “has no equivalent” in the auto market. The firm stated that it was difficult to find an analogous situation in automotive history where a brand had lost value so rapidly.
Contact the author: Kevin.Williams@InsideEVs.com
This opinion piece was written by Kevin Williams and was first seen on MSN.com
