Tesla Stock: Analyst Predicts Rebound Despite Political Turmoil and Sales Slump

Tesla shares have seen a steep decline since the beginning of the year, losing around 40% of their value and currently trading at $241.55 as of April 16, 2025. A key factor contributing to this downturn appears to be the controversial behavior of Tesla CEO Elon Musk, whose political actions have sparked widespread backlash.

Musk’s Political Involvement Damaging Tesla’s Image

Tesla has always been closely associated with Musk’s public persona. However, recent headlines surrounding him have raised concerns, especially as his political affiliations appear to lean increasingly far-right. Musk has publicly supported Donald Trump during his presidential campaign and was appointed by Trump to serve as a special advisor for the newly established Department of Government Efficiency (DOGE). This government body is tasked with improving the efficiency of federal agencies and cutting administrative costs.

In this new role, Musk initiated a sweeping wave of job cuts across various federal agencies, a move that has made him increasingly unpopular. This negative sentiment has spilled over to Tesla, with protests and boycott calls growing louder. The impact is already visible in the company’s performance: Tesla’s vehicle deliveries dropped approximately 13% year-over-year in the first quarter, with only 336,681 vehicles shipped — significantly below analysts’ expectations.

Despite Setbacks, Analyst Sees Bright Future for Tesla

Despite the recent turmoil, some analysts remain bullish on Tesla’s future. According to TipRanks, Mickey Legg from Benchmark has revised his price target for Tesla shares downward — from $475 to $350 — but the new target still represents a notable upside from current levels. Legg maintains a “Buy” rating on the stock and continues to include it among Benchmark’s top investment ideas.

“We believe the recent stock decline and revenue drop, while substantial, are overstated given the short-term nature of the issues affecting the company and the many opportunities ahead,” Legg stated. He suggests that beyond political setbacks, other non-alarming factors might explain Tesla’s recent weakness. These include growing global competition, an aging vehicle lineup, delays in launching new products, regulatory uncertainty, and new tariffs.

Key Catalysts May Drive Tesla’s Recovery

Legg sees significant potential for the stock to rebound. He notes that Tesla is preparing to launch a new vehicle model in the second quarter, which could help revive sales. Additionally, the highly anticipated rollout of Tesla’s robotaxi service is slated for June in Austin — a project that could mark a major step forward for the company.

Furthermore, rumors suggest that Musk’s role in the new U.S. administration may become less visible over time. If true, Legg expects the political backlash against Tesla to ease as the year progresses.

Looking further ahead, the analyst points to long-term growth drivers. He views Tesla’s Optimus robot project as a possible “game-changer,” with the potential to transform the company from a car manufacturer into a leading automation provider. Legg also highlights that Tesla’s production is largely concentrated in North America, making it less vulnerable to Trump’s new tariffs than traditional automakers that rely heavily on international components.