Tesla's Rough Road Ahead: Is a 50% Stock Crash Looming?
Hey everyone, so let’s talk about what’s going on with Tesla right now, because the headlines are anything but reassuring—especially if you're a TSLA investor. According to a recent analysis from Wells Fargo, Tesla's stock could potentially plunge another 50%, which would take it all the way down to $130 per share. Yeah, you heard that right—50%. And this isn’t just a throwaway prediction. It's grounded in some serious headwinds that the company is facing across the board.
First off, let's talk about vehicle deliveries. Tesla's sales are softening across its three biggest markets—Europe, China, and the U.S. Through 2025, deliveries are projected to drop by 40% in Europe, 14% in China, and 3% in North America. Those are big numbers, and they’re spooking investors. There’s also political noise surrounding the company, especially with Elon Musk’s high-profile alignment with the Trump administration, which is stirring up protests and could further hurt public sentiment.
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Now, if sales are sliding, then of course earnings are going to take a hit too. Wells Fargo is forecasting a 25% decline in Tesla’s earnings per share by 2025. And here’s the kicker—Tesla doesn’t have many levers left to pull. They’ve already slashed prices to try to keep demand up, but that’s eating into profit margins. To make things worse, there’s speculation that the $7,500 federal tax credit might get cut under the Trump administration, making Teslas even less appealing price-wise.
A lot of the bullish hope around Tesla rests on the promise of a low-cost EV, possibly under $30,000. But Wells Fargo’s not buying the hype just yet. There’s been radio silence about this model, and the closer we get to its supposed reveal date without details, the more skeptical investors get. And even if it does launch, it might just cannibalize existing Tesla models without really adding to total sales.
And what about the much-hyped Cybercab—Tesla’s take on a fully autonomous robotaxi fleet? Well, analysts are doubtful. Tesla’s approach to autonomy, which relies solely on cameras and software (no LIDAR), is seen as risky. There hasn’t been much unsupervised testing, and let’s be honest, the expectations here are sky-high. If that robotaxi fleet isn’t out there by June giving real rides to real people, investors could be massively disappointed.
Lastly, let’s talk about valuation. Tesla is currently trading at a price-to-earnings ratio of 96x. That’s nearly four times higher than its peers in the so-called “Magnificent 7.” And yet, its earnings growth is projected to be way lower—just 3% compared to the average 15% of its big-tech counterparts. So yeah, right now, it’s hard to justify Tesla’s price tag given the fundamentals.
All in all, it looks like a tough road ahead for Tesla. If you’re thinking about investing or already holding TSLA, these next few quarters could be pretty bumpy.
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