As political rifts begin to tear at the foundations of business empires, Wall Street's patience has also run out.
Since Musk announced at the end of April that he would withdraw from DOGE, Tesla's stock price had soared nearly 45%. However, last Thursday's &#34;Trump&amp;Musk mutual tearing battle&#34; turned all of that into nothing—Tesla plummeted 14% in a single day, and although there was a slight rebound on Friday, the stock price has basically returned to 2022 levels, completely erasing all gains from Musk's political investments.
Under multiple pressures such as the disappearance of political shelter, deteriorating fundamentals, and a shifting policy environment, analysts have begun to lower Tesla's sales expectations. Last week, Wall Street Insight mentioned that Goldman Sachs significantly cut Tesla's second-quarter delivery expectations from 410,000 units to 365,000 units, far below the consensus expectation of 417,000 units. The long-term outlook is equally bleak, as Goldman Sachs has drastically reduced Tesla's delivery expectations for the next three years.
Baird Equity Research unusually downgraded Tesla from &#34;outperform&#34; to &#34;neutral&#34; on Monday, pointing out that the electric vehicle giant is facing &#34;too many uncertainties on too many fronts.&#34;
Under the triple pressure of political uncertainty, fundamental pressures, and valuation bubbles, Tesla's short-term performance is likely to be far from optimistic. In the long run, last week's plunge may just be the prelude to this adjustment. On Monday, Tesla fell another 2.28% in pre-market trading.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/342aa385-c424-4641-823d-1dcb66961ced.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/342aa385-c424-4641-823d-1dcb66961ced.png"/>
<h2>Tesla downgraded by Wall Street, political risk becomes a new variable</h2>
The downgrade decision by Baird analysts Ben Kallo and Davis Sunderland is not an isolated event. Among 18 Wall Street analysts, only 10 currently give a buy rating, 4 hold, and 4 sell. The firm maintains a target price of $320, while Tesla's stock price closed at $295 on Friday, down 26% year-to-date.
Analysts pointed out that although Tesla's stock price has rebounded 33% since hitting a 2025 low on April 8, this rally mainly relies on speculation about cheaper models and the upcoming robotaxi service to be launched on June 12 in Austin, Texas:
<blockquote>
&#34;We believe Musk's comments about the rapid expansion of robotaxis are overly optimistic, and this excitement has already been factored into the stock price.&#34;
</blockquote>
What worries Baird analysts the most is the sharp deterioration in Musk's relationship with President Trump. Analysts believe that the market's reaction to Thursday's sharp decline reflects three interconnected concerns
Policy shocks hit hardest. JP Morgan recently stated that Trump's budget proposal could halve Tesla's operating profits. They estimate that the end of consumer electric vehicle tax credits will result in a loss of $1.2 billion, while the cancellation of carbon tax credits will cause a $2 billion impact. As the relationship between Trump and Musk deteriorates, the likelihood of Musk persuading Republicans to amend the proposal is minimal.
Political dividends have completely disappeared. Until last week, Musk's other companies seemed to benefit from his government work: X's debt sales went smoothly, and SpaceX and Starlink received various perks. Tesla investors may have also expected similar treatment, but that possibility no longer exists.
Partisan consumption shows divergence. An analysis by TD Cowen of Tesla's U.S. sales based on county political leanings shows that since the Trump-Musk collaboration began, sales in red counties have rebounded and taken a larger share, while sales in blue counties have declined.
TD Cowen's Itay Michaeli and his colleagues pointed out that if all red counties could reach the electric vehicle penetration rate of red counties in Texas (which saw significant growth in the first quarter), electric vehicle sales would jump by 39% this year. However, as Musk stands on the opposite side of Trump, Republicans' enthusiasm for electric vehicles—especially Tesla electric vehicles—may wane.
<h2>Deteriorating fundamentals worsen the situation, Wall Street's confidence shaken</h2>
The political turmoil is just a microcosm of Tesla's predicament. The year 2025 could be tumultuous for this electric vehicle manufacturer: weak sales in Europe, with many buyers boycotting Tesla due to Musk's political stance; in the second-largest market, China, the company faces increasingly fierce competitive pressure.
Analysts are lowering Tesla's sales expectations, predicting a more drastic decline by the end of this year and in 2026. Last week, Goldman Sachs significantly cut Tesla's second-quarter delivery forecast from 410,000 units to 365,000 units, far below the consensus expectation of 417,000 units. The long-term outlook is similarly bleak, as Goldman Sachs has drastically reduced Tesla's delivery expectations for the next three years. As sales decline, gross margins are continuously eroded, and further deterioration is expected.
Tesla's other business segments also face numerous obstacles: the high-margin battery business is impacted by tariffs, while the robotaxi fleet is lagging behind competitors like Waymo.
Baird analysts also lowered their 2026 delivery expectations to reflect the impact of the cancellation of electric vehicle tax credits. Although Musk has promised that hundreds of thousands of robotaxis will be on the road in the second half of next year, Baird expects the actual number to be only 6,000. Analysts acknowledge that presence in this field may be more important than the actual number deployed, but they believe Tesla faces greater business difficulties, and profitability may be lower than investors expect.
<h2>Optimistic expectations remain, but short-term pain is inevitable</h2>
Despite most analysts lowering their expectations, there are still relatively optimistic assessments.
Emmanuel Rosner of Wolfe Research believes that the impact of the budget proposal may not be as severe as JP Morgan predicts. His analysis includes:
<blockquote>
<ul>
<li>Tesla's actual tariff rate in the U.S. is zero, lower than competitors' levels of over $2,000 to $6,000, creating a pricing umbrella;</li>
<li>Management plans to launch an affordable product line, which could bring healthy profit margins under scale;</li>
<li>In the medium term, as federal and state emission standards relax, some automakers may be less willing to promote electric vehicles solely for compliance purposes, thereby improving the pricing environment for electric vehicles.</li>
<li>Kallo and Sunderland remain optimistic about Tesla's long-term prospects, stating it is still a &#34;core holding&#34; with &#34;extraordinary opportunities&#34; in robotaxi and robotics technology.</li>
</ul>
</blockquote>
However, under the triple pressure of political uncertainty, fundamental pressures, and valuation bubbles, Tesla's short-term performance is likely to be less than optimistic. As the honeymoon period between business geniuses and political strongmen comes to an end, the market is reassessing the true value of the company—and this process may be more painful than investors imagine

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The mutual tearing between "Trump&Musk" has left Tesla on the brink, with a 14% plunge last Thursday bringing the stock price back to 2022 levels, completely erasing all gains from Musk's political investments. Amid deteriorating fundamentals, the disappearance of political dividends, and partisan consumer differentiation, Wall Street has rarely downgraded Tesla from "outperform" to "neutral." On Monday, Tesla fell another 2.28% in pre-market trading

- Tesla's stock has faced significant volatility, dropping 14% in one day due to political tensions and analyst downgrades.  
- Goldman Sachs reduced Tesla's Q2 delivery forecast from 410,000 to 365,000 units, reflecting deteriorating fundamentals and political risks.  
- Analysts express concerns over Tesla's long-term outlook, citing challenges in sales, competition, and the impact of changing political dynamics on consumer sentiment.

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Tesla's stock price has fallen back to 2022! Trump & Musk "tear their faces," and the decline has just begun?