On Tuesday, Tesla’s shares continued to fall nearly 6% on Monday. They settled at $227.50, a mere $5.85 above the annual low set on April 8th. The transition has created some major headwinds for the electric vehicle manufacturer as it prepares to announce its first-quarter earnings report. Analysts are expecting revenue to reach $21.24 billion. This figure is a slight dip from last year at this time. Investors are legitimately spooked by the company’s track record.
The company’s stock has come under tremendous pressure over the last several months due to persistent negative political attacks and fierce competition in their most important markets. Investors are understandably nervous with respect to the time that CEO Elon Musk is spending on political engagements. They’re particularly worried about his involvement with the Trump administration. Musk’s political maneuvers have resulted in protests and boycotts targeting Tesla vehicles and facilities, further complicating the company’s standing in the market.
Meanwhile, Tesla is preparing for its Quarterly earnings report, which will include a live update from the company’s HQ. Analysts expect the profit per share to reach around 40 cents. That’s based on the company’s announcement of a third-quarter vehicle delivery disaster. Although they were able to pass some costs to consumers, they only delivered 336,681 units in that first quarter—13% lower than last year.
The dramatic effect of political factors on Tesla’s brand image must be considered. Analysts have noted that “Tesla has now unfortunately become a political symbol globally of the Trump Administration/DOGE,” according to Dan Ives of Wedbush Securities. Consumer perception of electric vehicles may be negatively impacted by stigma, potentially discouraging EV sales. Analyst research from Caliber indicates a huge decrease in that willingness. Just 27% of March survey respondents said they would purchase a Tesla vs. 46% in January 2022.
Analysts at Oppenheimer were just saying they are concerned about softening demand in China. They worry that increasing nationalistic consumer behavior might strengthen competitive threats from home country brands. They highlighted that “the bigger issue for the company is potential weakness in China demand and margin impact due to the Trump tariffs.” This would likely put pressure on Tesla to export more of the vehicles it makes in China, putting additional downwards pressure on pricing.
Tesla’s share price has taken a brutal whack so far this year, crashing 44%. This drop came on the heels of the company’s worst quarter since 2022 that ended in March. These dramatic changes have left investors wondering how Musk plans to steer through these choppy waters.
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