March 16, 2025 – Tesla Faces Unprecedented Challenges as JPMorgan Chase Paints Bleak Outlook
JPMorgan Chase has delivered a pessimistic forecast for Tesla’s future, reporting on Saturday that the brand could see its worst quarterly delivery performance in three years. The financial institution slashed its delivery expectations for Tesla by 20%, dropping from an initial estimate of 444,000 vehicles to 355,000. Notably, the original projection was already slightly higher than the industry consensus of 430,000 units. Furthermore, JPMorgan believes that Tesla’s stock price has significant room for a downward plunge, potentially tumbling to $120 per share, nearly half of its current value.
Several factors have contributed to Tesla’s precarious position. Firstly, the frequent adjustments to tariff policies by the US government have subjected automakers and their supply chains to immense uncertainty. Tariffs can be imposed at any moment, hinging on the US government’s stance towards Canada, Mexico, the EU, or China. This unpredictability has severely hampered long-term planning for businesses.
Secondly, Musk’s stance on X and real-world politics has become a prominent and undeniable focus, triggering a wave of boycotts in multiple countries and regions, including Canada. This has further tarnished Tesla’s brand image.
Moreover, Tesla’s sales in Europe have experienced a continuous decline. Although the Chinese market remains robust, it is insufficient to propel overall growth, as local Chinese brands are aggressively seizing market share.
Meanwhile, Tesla’s product update pace has failed to meet market expectations. Despite refreshes to the Model 3 and Model Y, the changes are largely incremental, leading to waning consumer interest in these models. Compounding these issues are Musk’s controversial remarks, global inflation, and high interest rates, creating a perfect storm of adverse factors for Tesla.
As of now, Tesla’s market slump is unfolding midway through the first quarter, with the full impact likely to become clearer when the second-quarter financial report is released. JPMorgan highlights that Tesla’s current predicament is unprecedented within the automotive industry. “In the history of the automotive sector, we struggle to find a similar case where a brand’s market capitalization has shrunk so dramatically in such a short period,” the institution notes.
