Why Tesla Stock Is Crashing Today — It's Not Just Trump's Tariffs

Shares of Tesla (TSLA -10.39%) are sliding on Friday. The electric vehicle maker’s stock lost 10% as of 1:30 p.m. ET and was down as much as 11.7% earlier in the day. The decline comes as the S&P 500 and Nasdaq Composite both lost more than 5%.

As the escalating trade war hammers markets, Tesla received a bearish adjustment from a key analyst who said Tesla has suffered “unprecedented brand damage” due to CEO Elon Musk’s involvement in politics.

J.P. Morgan slashes earnings estimates

J.P. Morgan analyst Ryan Brinkman cut his first-quarter earnings estimate, lowering it from $0.40 per share to $0.36 per share. Brinkman also lowered his full-year projection to $2.30 per share. The Wall Street consensus is $2.70.

Brinkman cited Tesla’s announcement just days ago that it had delivered just 336,681 units in Q1, making it the worst quarter for deliveries since 2022. He believes this confirms the narrative that Musk’s political involvement had significantly damaged Tesla’s brand, saying, “The sales report causes us to think that — if anything — we may have underestimated the degree of consumer reaction.”

The latest delivery report echoes the numbers reported from around the globe. Tesla has seen its sales plummet in key markets from China to France. Shareholders who are growing increasingly concerned with the effect Musk’s public profile is having on Tesla sales are also frustrated by his lack of involvement in running the company given his role as its chief executive.

It now seems he may be trying to right the ship as it was reported he may be leaving his post in the Trump administration in order to focus his energies on Tesla. Even if he returns, I think you should avoid investing in Tesla as — in my opinion — its valuation is wildly out of step with reality.