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Investing.com -- Tesla (NASDAQ:TSLA) shares continued to face significant pressure in recent months, with the stock price plummeting over 50% from its December highs.
According to Wedbush analysts, the electric vehicle (EV) maker and its CEO Elon Musk now face a “moment of truth.”
There have been increasing protests at Tesla dealerships and instances of violence against Tesla drivers in the U.S. and Europe, events which Wedbush attributes to Musk’s intensified focus on his new role at DOGE and his involvement with the Trump administration.
As a result, Tesla shares tumbled more than 15% Monday, hitting its lowest level since October. The stock is down more than 40% since the start of the year.
But Wedbush believes it could get even worse.
Should Musk continue to prioritize his DOGE-related activities over Tesla, especially in a turbulent period like this one, the damage to the brand “will become more pervasive as right now our work in the field shows less than 5% (very contained) of Tesla owners would second guess buying a Tesla again due to Musk,” analysts led by Dan Ives said.
“There has been little to no sign of Musk at any Tesla factory or manufacturing facility the last two months and perception has become reality for Tesla shares,” they emphasized.
Trump’s election as president is seen as a pivotal moment for Musk and Tesla, potentially accelerating a federal framework for autonomous vehicles. However, the DOGE initiative “has now intertwined Tesla into this brewing political firestorm,” the analysts added.
Overall, Wedbush remains bullish on Tesla, describing the current period as “the start of the biggest innovation and technology cycle in Tesla’s history ahead over the next few years.”
The investment bank expects the launch of a new sub $35,000 Model before summer, which is expected to stimulate global EV demand and put Tesla back on a growth trajectory towards a 2 million delivery rate.
Moreover, it predicts the launch of unsupervised Full Self-Driving (FSD) in Austin, Texas, this June, marking the beginning of the autonomous era for Tesla.
Wedbush values Tesla’s autonomous technology at $1 trillion and foresees Tesla dominating the autonomous market both in the U.S. and internationally.
The report also points out that other automakers may adopt Tesla’s FSD technology, contributing to the growth of the autonomous industry, with Tesla’s Cybercab and Optimus projects expected to significantly contribute to the company’s valuation in the coming years.