Economy Update – Baghdad
Elon Musk’s recent appointment as a consultant to the U.S. State Department appears to have elicited negative investor sentiment, as evidenced by Tesla’s stock experiencing a consistent decline for seven consecutive weeks.
This prolonged downturn marks a significant shift for the automaker.
Since Musk’s arrival in Washington to serve in the Trump administration as Minister of Government Efficiency, Tesla’s shares have fallen consistently, closing at $270.48 last Friday—this represents the company’s most extended losing streak in 15 years. Over the past week, Tesla’s stock registered a decline of over 10%, reaching its lowest level since November 5, coinciding with the election day that brought Trump to power, when stocks were priced at $251.44. Since hitting a peak of approximately $480 on December 17, Tesla has lost over $800 billion in market value.
Revising Price Targets
Amid these declines, several Wall Street analysts have revised their price targets for Tesla’s stock downward. Notably, Bank of America lowered its target from $490 to $380, citing concerns regarding new vehicle sales and a lack of developments from Musk regarding the proposed “low-cost model.” Similarly, Goldman Sachs adjusted its price target from $345 to $320, highlighting declining sales of electric vehicles across various markets in Europe, China, and parts of the United States during the initial months of the year.
According to analysts at Goldman Sachs, Tesla faces significant competitive pressures in China, where rival manufacturers offer comprehensive self-driving capabilities without the additional cost structure that Tesla employs.
Investor Concerns Regarding Policy Impact
The apprehension on Wall Street is not solely limited to Tesla’s sales figures and production data; investors are also contemplating the potential implications of Musk’s activities and policies within the Trump administration on the company’s long-term performance. There is a growing concern about the duration of this influence on Tesla’s operations.
Before transitioning to his role in the government, Musk already led several private enterprises, including the emerging artificial intelligence venture, XAI; the social media platform, X; and SpaceX, which is focused on satellite projects.
