TLDR
- Tesla stock has plunged 44% in 2025, making it the worst performer among the “Magnificent Seven”
- A public disagreement erupted between Elon Musk and Trump advisor Peter Navarro over tariffs
- Tesla’s Q1 earnings report on April 22 is being closely watched after poor delivery numbers
- Musk’s political role in Trump’s DOGE initiative has shifted from a perceived asset to a liability
- Analysts are concerned about Tesla’s core electric vehicle business despite future AI initiatives
Tesla investors have experienced a wild ride over the past few months. After barely moving for most of 2024, shares rocketed more than 60% through December following Donald Trump’s election victory. But the enthusiasm has reversed dramatically in 2025, with the stock now down 44% year-to-date.
The latest challenge came Wednesday when Tesla shares fell in early trading after CEO Elon Musk publicly called Trump’s trade advisor Peter Navarro a “moron” on social media.
The spat centered around tariff policies that could raise costs for Tesla. Navarro had downplayed Tesla’s manufacturing capabilities on CNBC, saying: “We all understand in the White House…that Elon is a car manufacturer…but he’s not a car manufacturer, he’s a car assembler.”
Musk fired back on his platform X: “Navarro is truly a moron. What he says here is demonstrably false.” He followed with additional posts defending Tesla’s manufacturing footprint.
This public disagreement has investors concerned. Both men have Trump’s ear – Navarro on trade policy and Musk as leader of the Department of Government Efficiency (DOGE), the president’s waste-cutting initiative.
Musk has positioned himself against broad tariffs, stating the U.S. and Europe should not impose tariffs on each other. This stance could put him at odds with key elements of Trump’s economic agenda.
From Asset to Liability
In a strange turn of events, Musk’s close ties to the Trump administration have gone from being viewed as a valuable asset to a potential liability.
When Trump won in November, investors cheered Musk’s appointment to lead DOGE. The market anticipated a looser regulatory environment that could help Tesla’s autonomous driving ambitions.
But several months later, Musk’s political activities have become polarizing. Some analysts worry this is damaging the Tesla brand and could hurt demand for the company’s vehicles.
These concerns seem justified by recent performance data. Tesla recently reported disappointing first-quarter delivery and production statistics, adding to investor anxiety.
Even longtime Tesla bull Dan Ives of Wedbush Securities has expressed worries about the company’s direction. This shift in sentiment from one of Wall Street’s most optimistic Tesla analysts has contributed to the stock’s decline.
All Eyes on April 22
Tesla is scheduled to report first-quarter earnings after market close on April 22. This upcoming earnings call is being viewed as pivotal for the company.
While the poor delivery and production numbers provide some indication of what to expect, investors are eager to hear Musk’s plan to address the challenges facing Tesla’s core electric vehicle business.
During January’s earnings call, Musk successfully shifted attention away from weakening car demand by focusing on Tesla’s artificial intelligence initiatives – primarily the Cybercab robotaxi and Optimus humanoid robot.
While these projects generate excitement, they represent Tesla’s long-term future rather than its immediate business needs. Investors will be watching closely to see if Musk addresses the current strategic issues or attempts to deflect with more talk about AI.
Benchmark analyst Mickey Legg added Tesla stock to the firm’s “Best Ideas” list on Wednesday, citing the release of a new Tesla model expected in the second quarter of 2025. Legg believes this could reverse the recent decline in vehicle sales.
The analyst also expressed cautious optimism about Tesla’s planned rollout of robotaxis as a paid service in Austin, Texas, scheduled for June. However, Legg simultaneously cut his price target for Tesla from $475 to $350, tempering the impact of the “Best Ideas” designation.
The stock market’s reaction to Trump’s tariff policies has been broadly negative. Since Trump’s “Liberation Day” on April 2, the S&P 500 has dropped 12.1%, while Tesla stock has fallen 21.5% over the same six-day period.
For Tesla investors, the next few weeks will be crucial in determining whether the current sell-off is overdone or if the stock has further to fall.
Some market watchers believe Musk might be positioned to influence Trump toward softening his stance on tariffs. If successful, this could provide relief not just for Tesla but for the broader market.
For now, investors and analysts alike are taking a cautious approach, with many suggesting it might be prudent to wait until after the April 22 earnings call before making any major moves on Tesla stock.
