The sharp decline in Tesla's (NASDAQ: TSLA) share price has been one of the biggest stories of 2025 and a recent report by JPMorgan (NYSE: JPM) analysts predicts even heavier losses on the horizon. The analysis bluntly observed, “We (JP Morgan) struggle to think of anything analogous in the history of the automotive industry in which a brand has lost so much value so quickly.”
Forbes published highlights of JPMorgan's analysis shortly after Fortune reported Tesla's stock lost $127 billion in value in just one day of trading in early March. Morgan Automotive Analyst Rob Brinkman wrote the report, which downgraded its expectations for Tesla's delivery vehicles this quarter from 445,000 to 335,000. If the report's predictions are accurate, Tesla's delivery total would be its lowest since Q3 2022.
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The report pulled even fewer punches when addressing the cause of Tesla's sudden and dramatic decline in popularity and value. It specifically mentioned Tesla CEO Elon Musk’s "divisive role in the new government." That's a not-so-subtle way of saying JPMorgan believes that Elon's position heading the Department of Government Efficiency has hurt the brand's image.
Forbes also pointed to the turn that many Americans have made on how they view Musk. It referenced a recent CNN poll that found 53% of Americans hold a "negative view" of Musk. It appears a large chunk of that 53% includes people who would have purchased a Tesla but have now reconsidered. Brinkman's analysis noted a 50% year-on-year decline in new Tesla registrations for January.
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Well-heeled progressives who want to own a luxury car while also lowering their carbon footprint flocked to Tesla almost immediately after their release and still account for a large portion of the automaker's customer base. However, many of them appear to be growing increasingly uncomfortable with Musk's sharp right turn politically and how he's running DOGE. It's almost impossible to imagine that it isn't negatively impacting Tesla sales.
Musk's bull-in-a-China shop at DOGE is not unusual in the tech sector, where Meta (NASDAQ: META) CEO Mark Zuckerberg once famously told his employees to "Move fast and break things." However, applying that same ethos to government agencies has proven to be much more problematic and less popular with the public, especially the ones who buy Teslas.
Musk's work at DOGE and his embrace of Trump's policies have certainly endeared him to a new fan base on the right, but it appears to be having the opposite effect on Tesla sales. Forbes quoted Brinkman's analysis as saying, "While as many members of the political right may be pleased as those on the left are displeased, the effect on Tesla sales seems nevertheless negative.”
It's no secret that most of Musk's right-leaning fanbase prefer gas-powered vehicles, which means he can't rely on them to make up for the falloff in sales. Forbes also said that Brinkman believes that "Tesla appears to have the most to lose," if the Trump administration rolls back electric vehicle tax credits. These incentives played a huge role in boosting the company's popularity with buyers.
The picture is also complicated overseas. According to CNN, Tesla's year-on-year sales are down by 76% in Germany, where Musk has recently embraced the country's far-right political party. CNN also reports a 49% year-on-year decline in Tesla sales in China. All told, it adds up to Tesla stock being down by over 40% since January. JPMorgan's report downgraded expectations for Tesla's share price to $120, which is almost 50% less than its current price.
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