For the past seven weeks, Tesla’s stock has been on a continuous decline since CEO Elon Musk took on a role in the Trump administration. The electric vehicle (EV) giant closed last Friday at $270.48, marking the longest losing streak in its 15 years as a public company.

Tesla shares plummeted over 10% for the week, reaching their lowest level since Election Day on November 5, when the stock closed at $251.44. Since its peak of nearly $480 on December 17, Tesla has shed more than $800 billion in market capitalization.

Wall Street Analysts Lower Price Targets

Several major Wall Street firms, including Bank of America, Baird, and Goldman Sachs, have revised their price targets for Tesla. Bank of America slashed its target from $490 to $380, citing falling new vehicle sales and the absence of an update on a low-cost Tesla model. Similarly, Goldman Sachs reduced its target from $345 to $320, pointing to weak EV sales in early 2025 across key markets in Europe, China, and the U.S.

Tesla’s competitive landscape in China appears particularly challenging. Goldman analysts noted that Tesla’s Full Self-Driving (FSD) software faces stiff competition, as many Chinese automakers offer smart driving features without requiring a separate purchase. This pricing strategy puts Tesla at a disadvantage in one of the world’s largest EV markets.

Baird further added Tesla to its list of “bearish fresh picks” this week. Analysts at the firm highlighted concerns over production downtime as Tesla transitions to manufacturing its updated Model Y SUV. This shift could complicate Tesla’s supply-side equation, potentially exacerbating financial pressures.

Musk’s Political Role Adds to Investor Uncertainty

Beyond Tesla’s financial metrics, investors are grappling with how Musk’s political involvement may impact the company’s performance. As an advisor to President Donald Trump and the head of the newly established Department of Government Efficiency (DOGE), Musk has become a central figure in the administration’s push to shrink federal agencies, cut spending, and reduce government influence.

Musk’s political actions and controversial statements on social media platform X have drawn criticism, including his attacks on judges and his promotion of misleading narratives about Ukraine. This has fueled anti-Musk and anti-Tesla sentiment in the U.S. and Europe, leading to protests, vandalism, and even suspected arson at Tesla facilities.

Tesla Bulls Face a “Gut Check” Moment

Even the most bullish Tesla analysts are acknowledging the potential risks associated with Musk’s political entanglements. Cleantechnica, a long-time Tesla advocate, recently published an opinion piece questioning whether Tesla owners should sell their vehicles and whether the company’s board should consider replacing Musk as CEO.

Dan Ives of Wedbush Securities, a known Tesla supporter, described the situation as a “gut check moment for Tesla bulls, including ourselves.” Despite the negative sentiment, Wedbush added Tesla to its “Best Ideas” list, setting a 12-month price target at $550.

“The best thing that ever happened to Musk and Tesla was Trump in the White House,” Wedbush wrote, arguing that a deregulated environment could benefit Tesla’s long-term vision. The firm believes that federal support for autonomous vehicle technology could be pivotal for Tesla’s future growth.

Optimism for a 2025-2026 Product Cycle

Despite the current downturn, some analysts see potential for a Tesla resurgence. TD Cowen analysts believe that Tesla is at the start of a major product cycle that could drive volume growth and shift market sentiment in the coming years.

Tesla’s long-term growth strategy includes launching an affordable EV model, expanding its robotaxi and ride-hailing services, and advancing humanoid robotics for factory work. If successful, these innovations could help Tesla regain its competitive edge and restore investor confidence.

Musk’s ability to refocus on Tesla and steer the company through these turbulent times will be crucial. Some analysts anticipate that by the second half of 2025, Musk will prioritize Tesla over his other ventures, potentially stabilizing the company’s outlook.

The Road Ahead

Tesla’s seven-week losing streak reflects a mix of financial, political, and competitive pressures. While short-term concerns over sales, production, and Musk’s political activities weigh on investor sentiment, long-term believers remain optimistic about Tesla’s ability to innovate and lead the EV market.

Whether Tesla can rebound depends on several factors, including Musk’s leadership choices, global EV demand, and regulatory developments. As the company navigates these challenges, all eyes remain on how it adapts and evolves in the ever-changing automotive landscape.