Tesla’s stock (TSLA) took a hit today, falling 1.1% in premarket trading, after seeing a strong 6.7% rally earlier this week. This dip follows news of a 90-day pause on steep import tariffs between the U.S. and China. While the trade news initially helped the stock soar, the realities of Tesla’s sales challenges in China are catching up. April saw a nearly 9% drop in Tesla’s Chinese sales, as Chinese consumers continued to shy away from American products amidst the ongoing trade war. According to Cantor Fitzgerald analyst Andres Sheppard, “Chinese consumers have avoided American products as the U.S.-China trade war escalated.”
Protect Your Portfolio Against Market Uncertainty
- Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter.
- Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox.
Trump’s Tax Proposal Could Hurt EV Sales
Meanwhile, Tesla investors are turning their focus back to the U.S. In a recent proposal, President Donald Trump’s administration suggested cutting the $7,500 tax credit for electric vehicles (EVs) by the end of 2025. While the bill also includes a provision to allow auto loan interest deductions on U.S.-manufactured cars, it could still significantly impact Tesla. The EV tax credit has been a crucial factor for U.S. buyers, and its removal could hurt demand for Tesla vehicles, especially in the affordable EV segment. Tesla manufactures all its vehicles domestically, which means it could be uniquely affected by this policy change.
Tesla’s Cybertruck Struggles to Meet Expectations
Adding to the concern is the sluggish sales of the Cybertruck. Despite more than a million preorders, Tesla only sold around 6,400 units of the truck in the first quarter of 2025. This sales disappointment has led to Tesla slashing prices by as much as $10,000 per vehicle. Slower production and excess inventory are beginning to weigh on the company’s bottom line. This has forced Tesla to offer hefty discounts to move units.
Is Tesla a Buy, Sell, or Hold?
While Tesla continues to show resilience, the combination of challenges—including the impact of trade tensions, potential loss of EV tax incentives, and slower Cybertruck sales—could hinder its path to long-term growth.
The latest data from TipRanks shows that Tesla currently holds a Hold rating from analysts. Out of the 37 analysts providing ratings, 16 analysts have rated Tesla as a Buy, while 10 analysts suggest holding the stock, and 11 analysts have issued a Sell rating. This mixed sentiment reveals differing views on the company’s prospects in the coming months.
The average price target for Tesla stands at $284.23, with a significant downside of 10.73% from its current trading price of $318.38. While this points to a potential dip in the stock’s value, the high price target of $450.00 suggests a potential upside of nearly 42% if the company meets its more optimistic goals. Meanwhile, the low price target of $115.00 reflects a more cautious outlook.
