One of Wall Street’s most bearish analysts on Tesla Inc. has further reduced their estimates for the company’s earnings, pointing to the significant backlash from car buyers against Elon Musk.
Tesla’s vehicle deliveries for the first quarter fell significantly short of even the pessimistic forecast by JPMorgan Chase & Co. analyst Ryan Brinkman. This outcome, as Brinkman mentioned in a report on Friday, confirmed the unprecedented damage to the brand that had been previously anticipated.
The sales figures have led Brinkman to believe that the actual consumer reaction may have been underestimated. Following this report, Tesla shares saw a decline of more than 4% at the start of regular trading. Since reaching a record high on December 17, the stock has fallen by 44% as of the close on Thursday.
In the first three months of the year, Tesla delivered 336,681 vehicles, marking its lowest quarterly total since 2022. While the company was transitioning production lines at its assembly plants to manufacture the redesigned Model Y, it also faced challenges due to Musk’s increasingly polarizing role in global political affairs.
JPMorgan now anticipates that Tesla’s first-quarter earnings will drop to 36 cents per share, down from an earlier projection of 40 cents and below the analysts’ average estimate of 46 cents. Brinkman also adjusted his full-year projection to $2.30 per share. According to analysts surveyed by Bloomberg, the average estimate for the company’s earnings is $2.70 per share, reflecting a 17% decline since Tesla last reported quarterly earnings in late January.
Elon Musk is expected to step back from his role leading the Department of Government Efficiency once his 130-day period as a temporary adviser to President Donald Trump concludes, as reported by Bloomberg on Thursday. Nonetheless, people familiar with the matter indicate that Musk will continue to hold significant influence over the federal cost-cutting effort and remain a confidant to Trump even after his formal departure.
Musk serves as a special government employee, a designation for temporary federal hires limited to 130 working days annually in their roles. A specific date for Musk’s departure has not been established, and the White House counsel’s office is responsible for determining when Musk has completed his 130 days, according to these sources.
Following his emergence as Trump’s largest contributor in the US presidential election, Musk shifted his focus to Europe earlier this year. He has been critical of more mainstream political figures and aligned himself with far-right parties and activists, a strategy that has backfired for Tesla. Sales in Germany, which hosts the company’s only vehicle-assembly plant on the continent, plummeted by 62% last quarter. This article was originally featured on Fortune.com.
