Ronald Jewsikow, an analyst at brokerage Guggenheim, said in a note to clients that he recommended investors continue to sell Trump stocks because the electric car maker's stock price is expected to drop more than 30% from current levels. After plunging 15.43% on Monday, the largest one-day drop since September 2020, Tesla's stock price rebounded for two consecutive trading days, rising 7.59% on Wednesday to close at $248.09. Still, the stock is down 48% since closing at a record $479.86 on December 17.
Jusico reiterated his sell rating on the stock and lowered his price target to $170 from $175. The new price target is 31.5% below current levels.
Jusico said one reason he is bearish on Tesla stock is that what he sees for updated Model Y demand, such as wait times and remaining inventory of older Model Ys, are negative. This leads him to believe that upcoming delivery figures will be "well below expectations".
Jusico now expects Tesla to deliver 358,000 electric vehicles in the first quarter, compared with the average estimate of 430,000 Wall Street analysts surveyed by FactSet.
Considering Tesla CEO Elon Musk's close relationship with U.S. President Donald Trump, and the fact that the so-called Department of Government Efficiency (DOGE) he leads has been cutting jobs and government programs, the "political noise" around Musk is also a reason for Jusico to be bearish on Tesla.
In recent weeks, there have been a series of protests against Tesla in many places in the United States. "At the very least, these protests are likely to have an adverse impact on store traffic and may impact consumer purchasing intentions," Jusico wrote. "While the protests may be short-lived, we believe the protests and partisanship are having an impact on demand, a change from our previous view that politics had no impact on sales."
He is also concerned about the declining profitability of electric vehicles amid signs that consumer demand is becoming more price-sensitive, known as demand elasticity.
Jusico said Tesla's 1.2% price increase in the first quarter led to a 26% drop in demand, which reduced demand elasticity to the lowest level since the electric vehicle price war in 2023.
He expects price cuts of 2% per quarter for the remainder of 2025, but that won't be enough to drive delivery growth.
He also worries that Tesla's rollout of a fleet of commercial robotaxis in the coming months, an expected major positive catalyst, will "underwhelm" in terms of scale.
"While we appreciate the excitement about self-driving taxis, we believe the stock is reaching a tipping point where the numbers start to kick in - based on our current model, (Tesla) has little room to cut prices before (free cash flow) becomes negative," Jusico wrote.