JPMorgan Says Tesla Could Lose 60% of Its Value. Wall Street Is Starting to Listen.

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JPMorgan Chase has drawn a line in the sand. The bank’s lead auto analyst, Ryan Brinkman, reiterated a price target of $135 on Tesla shares — a figure that implies a roughly 60% decline from recent trading levels. It’s not a new call. But the context around it has changed dramatically, and the rest of Wall Street is slowly catching up to what JPMorgan has been warning about for months.

Tesla stock, which traded above $350 in mid-December 2024, has already shed more than 40% from its post-election highs. The shares recently hovered near $250, a level that still strikes JPMorgan as wildly inflated relative to the company’s fundamentals. And the pressure isn’t letting up.

The core of Brinkman’s thesis is straightforward: Tesla’s automotive business is deteriorating, its margins are under siege, and the speculative premium baked into the stock — tied to autonomous driving, robotaxis, and humanoid robots — isn’t supported by near-term financial reality. As Futurism reported, Brinkman has maintained this bearish stance even as Tesla’s valuation ballooned past $1 trillion, arguing that the gap between the stock price and the company’s earnings power has only widened.

What makes this moment different is that JPMorgan is no longer a lonely voice.

The Bull Case Fractures

For years, Tesla’s stock price operated on a different physics than other automakers. Investors didn’t buy it for its P/E ratio or its free cash flow yield. They bought it for the promise of what Tesla might become — an autonomous mobility platform, an energy giant, a robotics company. That narrative, carefully cultivated by CEO Elon Musk, justified a market capitalization larger than the next ten automakers combined.

But the narrative is fraying. Fast.

First-quarter 2025 delivery numbers came in weak. Tesla reported approximately 336,681 vehicle deliveries globally for Q1, a significant miss against analyst expectations and a year-over-year decline that rattled even some of the stock’s most committed supporters. In Europe, the damage has been particularly acute. Tesla registrations in Germany plummeted, and across the EU, the brand has faced consumer backlash tied directly to Musk’s political activities and his prominent role in the Trump administration’s Department of Government Efficiency, known as DOGE.

This isn’t abstract brand risk. It’s showing up in the order books.

Dan Ives of Wedbush, long one of Tesla’s most vocal bulls on Wall Street, recently cut his price target and acknowledged that Musk’s political entanglements have become a “black cloud” over the stock. When your biggest cheerleader starts hedging, something fundamental has shifted. Ives still maintains an outperform rating, but his tone has turned noticeably more cautious, warning that the brand damage could take quarters — not weeks — to repair.

Meanwhile, several other analysts have trimmed targets and lowered delivery estimates for the full year. The consensus, once firmly anchored in optimism about Tesla’s second-half recovery, is splintering. Some firms now see 2025 as a transition year at best, a contraction year at worst.

JPMorgan’s Brinkman has been particularly pointed about the math. He’s argued that even if you grant Tesla generous assumptions on its energy storage business and give partial credit for future autonomous revenue, the stock still trades at a multiple that implies perfection across every business line simultaneously. His $135 target essentially values Tesla as a premium automaker with some adjacent businesses — not as the world-changing conglomerate its most ardent fans envision.

And the auto business itself? It’s grinding lower. Average selling prices have fallen as Tesla has repeatedly cut prices to defend volume. Gross margins in the automotive segment have compressed from the mid-20s percentage range to something closer to the high teens. The Cybertruck, once expected to be a margin-accretive product, has been plagued by production challenges and recalls. The refreshed Model Y is ramping, but ramp periods historically pressure margins before they help them.

The Musk Variable

No analysis of Tesla’s stock can ignore the elephant in the room. Elon Musk is simultaneously running Tesla, SpaceX, X (formerly Twitter), xAI, The Boring Company, and Neuralink while serving in an advisory capacity to the federal government. His attention is fractured in ways that would be extraordinary for any executive, let alone one running a company valued at nearly $800 billion.

The DOGE role has proven especially costly. Musk’s association with federal spending cuts and government workforce reductions has made him a polarizing political figure in ways that extend well beyond the United States. European consumers, in particular, have recoiled. Vandalism of Tesla vehicles and charging stations has been reported in Germany and France. Protest movements have organized specifically around Tesla ownership as a political statement.

So the brand that once signaled environmental consciousness and technological sophistication now carries political baggage in key international markets. That’s a problem when roughly half of Tesla’s revenue comes from outside the United States.

Musk has shown some awareness of the issue. He indicated in late March that he would begin stepping back from DOGE responsibilities, a signal that Tesla’s board and investors had likely been pressing for behind the scenes. But the damage to European demand may already be baked in for 2025, and rebuilding brand equity is a slow, expensive process.

There’s also the question of tariffs. The Trump administration’s evolving trade policies have introduced new uncertainty for automakers with global supply chains. Tesla manufactures in Fremont, California; Austin, Texas; Shanghai; and Berlin. Cross-border component flows and finished vehicle shipments are all subject to shifting tariff regimes. While Tesla’s U.S. manufacturing footprint theoretically insulates it from some import duties, its Shanghai-made vehicles face potential complications in various export markets. And retaliatory tariffs from trading partners could hit Tesla’s operations in ways that aren’t fully priced in.

JPMorgan has flagged tariff risk as an additional headwind, noting that the uncertainty alone tends to suppress consumer demand for big-ticket purchases like vehicles. When buyers don’t know what a car will cost next month, they wait.

The autonomous driving question looms over everything. Tesla has promised a robotaxi launch in Austin for June 2025, a timeline many analysts view with skepticism given the company’s long history of missed self-driving deadlines. Musk first promised full autonomy by 2020. Then it was 2021. Then 2022. The goalposts have moved so many times that even sympathetic observers have stopped treating specific dates as meaningful.

If the Austin robotaxi launch goes well — genuinely well, with regulatory approval and real commercial operations — it could change the calculus entirely. That’s the bull case in a nutshell: Tesla is one successful product launch away from justifying its valuation. But JPMorgan’s Brinkman has argued that investors shouldn’t pay today’s prices for tomorrow’s possibilities, especially when those possibilities have been perpetually deferred.

The Optimus humanoid robot program faces even longer timelines to commercialization. Musk has made sweeping claims about the robot’s potential market value — at one point suggesting it could be worth more than everything else Tesla does combined — but the product remains in early prototype stages. Manufacturing a humanoid robot at scale, at a price point that makes economic sense for industrial or consumer applications, is an engineering and production challenge of staggering complexity. No credible timeline exists for meaningful revenue contribution.

What a 60% Drop Would Actually Mean

If JPMorgan’s target proves correct and Tesla shares fall to $135, the company’s market capitalization would drop to roughly $430 billion. That would still make it the most valuable automaker on Earth by a wide margin — Toyota, the next largest, trades at a market cap around $250 billion. So even JPMorgan’s bear case doesn’t envision Tesla as a typical car company. It just envisions a Tesla that’s priced more in line with what it actually earns today, with a reasonable premium for growth.

A move to $135 would also wipe out enormous paper wealth. Musk’s personal fortune, heavily concentrated in Tesla shares and options, would take a significant hit. Retail investors, who have been among Tesla’s most loyal shareholders, would face painful losses. Tesla is one of the most widely held stocks among individual investors on platforms like Robinhood and Schwab.

But here’s the thing: a 60% decline from recent levels wouldn’t be unprecedented for Tesla. The stock fell roughly 65% from its November 2021 peak to its January 2023 trough. It has historically been one of the most volatile large-cap stocks in existence, capable of enormous moves in both directions. Investors who bought at the 2023 lows and held through the post-election rally are still sitting on substantial gains even after the recent selloff.

The question isn’t really whether Tesla can fall 60%. It has before. The question is whether the fundamental setup today resembles the conditions that preceded prior declines. JPMorgan clearly thinks it does — and then some.

Deliveries are falling. Margins are compressing. The CEO is distracted. Brand sentiment is deteriorating in major markets. Competition from Chinese EV makers like BYD is intensifying globally. And the stock still trades at a multiple that would be considered extreme for a high-growth software company, let alone an automaker facing volume declines.

Not everyone agrees, of course. Cathie Wood’s ARK Invest has maintained a long-term target that implies massive upside, predicated on the assumption that autonomous driving will eventually generate trillions in revenue. Morgan Stanley’s Adam Jonas, another prominent Tesla analyst, has been more measured but still sees significant value in the company’s technology platform beyond cars.

But the distribution of outcomes is widening. The gap between the most bullish and most bearish price targets on Wall Street has rarely been this large for a company of Tesla’s size. That dispersion itself tells a story: the market doesn’t know what Tesla is worth because Tesla’s value depends almost entirely on things that haven’t happened yet.

JPMorgan is betting that reality will eventually assert itself. That the stock price will converge with the financial statements rather than the press releases. That a company reporting declining deliveries and shrinking margins shouldn’t trade at 80 or 100 times earnings.

It’s a bet against the narrative. And right now, the narrative is losing.