07.07.2025 10:04
Tesla's stock price plummeted below the crucial $300 mark in pre-market trading, following a Wall Street analyst's downgrade. The significant decline, representing a 6.5% drop to approximately $294 before the market opened, contrasts sharply with its previous closing price of $315.35. This sharp fall is attributed to a confluence of factors, most notably a negative assessment from a prominent investment firm.
William Blair, a respected investment bank, revised its Tesla rating from "Outperform" to "Market Perform." Analyst Jed Dorsheimer cited the unexpected elimination of corporate average fuel economy (CAFE) fines, in addition to the anticipated removal of the $7,500 U.S. EV tax credit, as primary drivers for this downgrade. While the loss of the EV tax credit is expected to dampen demand for Tesla vehicles, the far more significant concern, according to Dorsheimer, is the potential loss of over $2 billion in profits derived from the sale of regulatory credits. This direct hit to profitability, unlike the indirect effect on demand from the tax credit, presents a considerably more serious threat to the company's financial outlook. Dorsheimer concluded that the combined impact of reduced demand and the jeopardized regulatory credit revenue was simply too risky for investors to ignore.
Adding to the downward pressure on Tesla's stock is investor concern regarding CEO Elon Musk's increasingly prominent political involvement. This apprehension has been exacerbated by Musk's recent announcement of a new political party, following his departure from the Trump administration and amidst a public spat with the former president regarding the new tax legislation. This heightened political engagement, according to Tesla analyst and long-time supporter Dan Ives, has led to a palpable sense of investor fatigue. Musk's continued foray into politics is clearly contributing to the current market uncertainty surrounding Tesla's stock performance. The situation underscores the delicate balance between a company's business operations and the public persona of its charismatic leader. The intertwined nature of these factors highlights a complex situation for investors attempting to assess Tesla's future prospects.
