Tesla stock plunges after Wedbush slashes price target amid brand damage
Tesla's challenges extend well beyond the technical picture
As of April 7, 2025, Tesla Inc. (TSLA) is trading at $239.43. The stock has faced considerable pressure this year, having declined nearly 37% year-to-date.
Support is now being tested at the $235 level, a psychologically and technically significant threshold. If this support breaks convincingly, the next downside target is likely around $220, a level last seen in early 2023. On the upside, resistance is firm at $250, and a stronger ceiling lies at $265, where the stock failed multiple times over recent weeks.
Technical indicators point to a bearish trend. The 50-day moving average is trending sharply downward and currently lies well above the price, reinforcing ongoing selling pressure. Similarly, the 200-day moving average, typically a long-term trend indicator, has also begun to slope downward, which confirms the shift in broader market sentiment toward Tesla.
TSLA stock price dynamics (February 2025 - April 2025). Source: TradingView.
Momentum indicators like the Relative Strength Index (RSI) show the stock in oversold territory, with readings below 30. While this might suggest a potential bounce in the near term, oversold conditions alone are insufficient to reverse the prevailing downtrend without a strong catalyst.
Market context and analyst opinions
Tesla's challenges extend well beyond the technical picture. In a significant development, Wedbush analyst Dan Ives, historically a bullish voice on Tesla, slashed his 12-month price target from $550 to $315—a staggering 43% cut. Ives cited the increasing politicization of the Tesla brand, largely attributed to CEO Elon Musk’s public political engagements.
According to Ives, Musk’s polarizing public image has damaged Tesla's brand equity and may alienate as much as 10% of its future customer base.
In parallel, geopolitical headwinds are intensifying. The re-imposition of tariffs under President Donald Trump’s second administration is already impacting Tesla. A 54% tariff on Chinese imports and a 34% retaliatory tariff from China create a dual pressure point: higher production costs and weaker demand in the Chinese market, where Tesla has a substantial footprint. Chinese EV manufacturers such as BYD, Nio, and Xpeng continue to gain ground, further eating into Tesla’s share in one of its key international markets.
First-quarter 2025 delivery numbers have reinforced these concerns. Tesla reported a 13% year-over-year decline in global deliveries, totaling approximately 336,700 units. This marks the first significant delivery miss in over two years and signals growing demand-side weakness amid economic and reputational challenges.
Price scenarios
Looking ahead to the next three to six months, Tesla's price trajectory remains vulnerable to both external and internal dynamics. In a bearish scenario, continued deterioration in brand perception and sustained geopolitical tensions could lead to a breakdown below the $235 support level, pushing the stock toward $220.
A bullish reversal would require a clear shift in fundamentals—either a breakthrough in geopolitical negotiations reducing tariffs or a surprise in Q2 earnings. In such a case, the stock could regain momentum toward $265, potentially higher if sentiment flips aggressively.
Last week, Tesla stock declined after the company missed Q1 2025 delivery estimates by nearly 90,000 vehicles, reporting just under 390,000 units. The shortfall highlighted weakening demand in key markets and growing consumer unease tied to Elon Musk’s political activism and product delays.
