Analysts Trim Target Prices for Tesla Stock, Citing Tariffs on Auto Industry

Analysts lowered targets for Tesla on Thursday amid concerns that tariffs will weaken the broader auto industry.

UBS cut its target price for Tesla (TSLA) to $190, estimating that the electric car manufacturer’s vehicle deliveries will fall 11% in 2025. Mizuho analysts said tariffs will increase Tesla prices and erode an already-weakening demand, lowering its target price to $375. A consensus analyst estimate puts Tesla shares somewhere in the middle, at around $327, or nearly 30% above Thursday’s closing price, according to Visible Alpha.

“While lower estimates for 2025 are now more broadly expected, we believe the whole trajectory of earnings for [Tesla] remains too high…” UBS wrote in a note Thursday, adding that shares will likely “be volatile but downward sloping.”

Tesla shares and the broader market have oscillated in recent days amid shifts in U.S. trade policy. CEO Elon Musk’s work slashing government spending has also influenced the car maker’s stock prices. Shares finished down more than 7% on Thursday but were still up more than 40% from a year earlier.

Although the Trump administration scaled back tariffs this week on a number of U.S. trading partners, goods from China, including car batteries and their components, are subject to tariffs of more than 100%. Import taxes of 25% remain in effect on cars, which will drive up prices, deter consumers, and potentially reduce Tesla’s 2025 U.S. revenue by 3.5%, Mizuho estimated.

“While a reduction in reciprocal tariffs helps reduce recession/demand destruction risk, we point out that the auto tariffs are sector specific, not subject to individual country trade negotiations,” UBS said. “In our view, they are likely to remain for the foreseeable future.”

Trade Policies May Usher in ‘New Era’ for Auto Industry

Sector-specific tariffs will likely add an average of $5,000 to car costs and depress domestic demand by 9%, according to UBS analysts, who factored in the current 25% tariff on cars and the 25% import tax on parts slated to go into effect early next month. The trade policies may usher in “a new era” for the U.S. auto industry, UBS said.

“Production disruptions are likely…and supply chains that were set up to be optimized over decades may need to be reimagined,” said UBS.

Tariffs may also reduce General Motors’ (GM) domestic annual revenue by 4% and Rivian Automotive’s (RIVN) by 3.5%, Mizuho estimated. Both Mizuho and UBS lowered their price targets for GM and Rivian’s stock, along with several auto suppliers.

General Motors fell 4%, and Rivian shares declined 2.6% on Thursday.