TLDR
- Tesla shares down 37% so far in 2025 with potential for further decline
- Long-time investor Ross Gerber publicly calls for Musk to resign as CEO
- Wedbush analyst Dan Ives cuts price target from $550 to $315, citing “brand crisis”
- Trump’s higher-than-expected tariffs could cost Tesla $3B in 2025 operating profits
- Q1 deliveries fell 13% year-over-year, missing analyst expectations by 40,000 vehicles
Tesla’s stock has been on a downward trajectory since the start of 2025, sparking concerns among investors and analysts alike. Once riding high on expectations following President Trump’s election, the electric vehicle maker now faces mounting pressure from both internal and external factors.
The company’s shares have tumbled 37% year-to-date, a stark contrast to the optimism that surrounded Tesla at the end of 2024. Investors who once cheered CEO Elon Musk’s close relationship with President Trump are now questioning whether his political involvement has become a liability.
Tesla delivered approximately 337,000 cars in the first quarter of 2025, representing a 13% decrease compared to the same period last year. This figure fell short of Wall Street expectations by roughly 40,000 vehicles, further dampening investor confidence.
Ross Gerber, whose investment firm holds over 262,000 Tesla shares, has become increasingly vocal about his dissatisfaction with Musk’s leadership. He believes the only solution is for Tesla to appoint a new CEO.
“With Tesla, it’s simple. It’s you get another face of Tesla,” Gerber stated in a recent interview. “It could be anybody, any CEO, somebody who’s in the middle, who is a great communicator, who refocuses people on what Tesla really does.”
A Perfect Storm of Problems
Musk’s role in the Trump administration’s Department of Government Efficiency (DOGE) has divided his attention away from Tesla. Although reports suggest Musk may soon leave this position, Gerber argues that the damage to Tesla’s brand extends beyond his government work.
“My anger rises that he says incredibly insulting things to people constantly,” Gerber explained, pointing to Musk’s controversial social media presence as a major concern for the Tesla brand.
The external environment has also turned hostile for Tesla. President Trump recently announced tariff rates much higher than market expectations, creating additional headwinds for the company.
While analysts had anticipated average import tariff rates between 10% and 15%, the actual rates came in closer to 25%. These higher tariffs will increase costs for Tesla’s imported parts and disrupt its global supply chain.
Wedbush analyst Dan Ives, previously one of Tesla’s strongest supporters on Wall Street, dramatically reduced his price target from $550 to $315 per share—a 43% cut.
He summed up Tesla’s current predicament as: “Musk-created brand crisis + Trump tariffs = perfect storm for Tesla.”
Financial Impact and Future Outlook
The tariffs alone could potentially reduce Tesla’s full-year 2025 operating profits by approximately $3 billion. For context, Wall Street currently projects a 2025 operating profit of about $8.3 billion for the company.
Ives also believes Tesla’s brand issues have already caused lasting damage. “Tesla has essentially become a political symbol globally, and that is a very bad thing for the future of this disruptive tech stalwart,” he wrote. “We now estimate Tesla has lost/destroyed at least 10% of its future customer base globally based on self-created brand issues.”
Gerber’s outlook is even more pessimistic. He predicts Tesla stock could fall an additional 50% from its current price of less than $250 per share. This would put the shares at approximately $141, representing a 67% decline from their all-time high reached in December.
Despite maintaining his Buy rating, Ives has lowered his price target to $315, a reduction that represents a potential market value loss of about $750 billion. The average analyst price target now sits at approximately $346 per share, down from a peak of $381 in early March.
Tesla did see a brief uptick in share price when Musk held an all-hands meeting earlier this month. However, without providing substantive reassurance about the company’s direction, the positive effect was short-lived.
Gerber believes that only a complete leadership change can save Tesla now. He wants the company to refocus on its technology and core business rather than the distractions created by its CEO.
For investors who have watched Tesla’s remarkable rise over the years, the current situation represents a dramatic reversal of fortune. The company that once seemed unstoppable now faces serious questions about its leadership and future direction.
As Tesla navigates these turbulent waters, all eyes remain on Musk and whether he will prioritize the company that helped build his fortune or continue with his increasingly divisive outside activities.
Whether Musk heeds these calls for his resignation remains to be seen, but one thing is clear: Tesla stands at a crossroads, and the decisions made in the coming months could determine its trajectory for years to come.
