Tesla logo illustration
Tesla’s stock (Nasdaq: TSLA) is expected to face headwinds in the foreseeable future. As an electric vehicle company that has enjoyed spectacular success over the past decade, Tesla’s growth appears to be stalled with analysts citing competition in the marketplace as well as distractions that are pulling CEO Elon Musk away from its core business.
Since President’s Trump election, Musk has taken a prominent role in the U.S. government’s Department of Government Efficiency (DOGE), an initiative aimed at streamlining federal operations, reducing waste, and cutting government spending. His involvement has since become mired in controversy with critics accusing Musk of overstepping his authority and conflicts of interest.
Vehicle sales for Tesla have been slipping around the world much of it due to the introduction of low-cost alternatives, but negative perception of Musk has also eroded Tesla’s brand equity and affected car sales for the simple reason that consumers who disagree with Musk’s political involvement do not want to be caught driving his vehicles.
Electrical vehicle incentives which had previously helped drive Tesla sales are no longer available. The Trump Administration is unlikely to introduce any programs to promote clean energy. Meanwhile, tariffs are likely to drive up the cost of manufacturing which will hurt profit margins for all automakers.
Given Musk’s involvement in SpaceX, Starlink xAI and the previous acquisition of Twitter, investors’ main worry is that he may have finally spread himself too thin. While many analysts remain bullish about the company’s overall business and prospects for Tesla’s new models, autonomous driving and robotics, a vocal group of investors believe that Musk is the main reason to assign a premium to Tesla stock. If Musk keeps getting distracted, Tesla’s growth story will stall out — the stock is unlikely to trade above the $400 a share mark for the rest of 2025.
Tesla stock was trading at $383 a share at the close of trading on Monday. The stock price doubled having traded at $190 per share a year ago.
