Tesla Inc. (TSLA) faced significant headwinds in the first quarter, with the company's stock shedding over a third of its value. The reason behind TSLA's rough patch includes a slump in sales within key regions, undesirable outcomes linked to CEO Elon Musk's political involvement, and potential tariff impacts that could harm its business operations.
Tesla's sales within the European Union dwindled for the second successive month in February, despite an overall uplift in new electric vehicle registrations. Meanwhile, Chinese competitors have gripped a major chunk of Tesla's share, with sales in the country tumbling by 50% on a year-over-year basis in February.
Tesla is also trying to negotiate the aftermath of Musk's political saga due to his affiliation with the Trump administration’s cost-cutting Department of Government Efficiency. The controversy led to protests and vandalism of Tesla units, causing one analyst to label it a "brand tornado crisis".
Regardless of the challenges, Wall Street remains relatively positive about Tesla's future. Out of 19 analysts surveyed by Visible Alpha, a majority of 11 analysts suggested a "buy" rating. Only four of them recommended a "hold" and "sell" rating each. The average price target set by these analysts is around $349, a significant 34% premium over the stock's Monday closing price of $259.16.