UBS and Mizuho analysts lowered their targets for Tesla on Thursday,citing the potential of tariffs to weaken the broader auto industry.
Demand for electric vehicles is already soft, and sales may fall an additional 11% in 2025, according to UBS estimates.
Analysts also pared back their price expectations for General Motors, Rivian, and a number of auto suppliers.
Analysts lowered targets for Tesla on Thursday amid concerns that tariffs will weaken the broader auto industry.
UBS cut its target price for Tesla (TSLA) to $190, estimating that the electric car manufacturer's vehicle deliveries will fall 11% in 2025. Mizuho analysts said tariffs will increase Tesla prices and erode an already-weakening demand, lowering its target price to $375. A consensus analyst estimate puts Tesla shares somewhere in the middle, at around $327, or nearly 30% above Thursday's closing price, according to Visible Alpha.
“While lower estimates for 2025 are now more broadly expected, we believe the whole trajectory of earnings for [Tesla] remains too high...” UBS wrote in a note Thursday, adding that shares will likely “be volatile but downward sloping.”
Tesla shares and the broader market have oscillated in recent days amid shifts in U.S. trade policy. CEO Elon Musk’s work slashing government spending has also influenced the car maker's stock prices. Shares finished down more than 7% on Thursday but were still up more than 40% from a year earlier.
Although the Trump administration scaled back tariffs this week on a number of U.S. trading partners, goods from China, including car batteries and their components, are subject to tariffs of more than 100%. Import taxes of 25% remain in effect on cars, which will drive up prices, deter consumers, and potentially reduce Tesla’s 2025 U.S. revenue by 3.5%, Mizuho estimated.
“While a reduction in reciprocal tariffs helps reduce recession/demand destruction risk, we point out that the auto tariffs are sector specific, not subject to individual country trade negotiations,” UBS said. “In our view, they are likely to remain for the foreseeable future.”
