More Musk-Trump Fallout: Tesla Sales Will Shrink At Historic Pace, Goldman Says
A pessimistic prediction for Tesla sales from Goldman Sachs added further fuel to the Tesla fire, as the unraveling relationship between Tesla CEO Elon Musk and his former close ally President Donald Trump plays out publicly, accelerating Wall Street's concerns about the increasing exposure of Tesla to Musk's outspoken politics.
Elon Musk has alienated 'multiple sides of the political spectrum' from Tesla, according to one ... More prominent Wall Street analyst.
In a late Thursday note to clients, Goldman Sachs analysts led by Mark Delaney slashed their forecast for second-quarter Tesla vehicle deliveries to 365,000, far below consensus analyst forecasts of 405,000, according to FactSet.
That would be an 18% decline from the same period last year, equating to by far the weakest quarterly deliveries growth since at least 2015, the extent of quarterly delivery data available on Tesla's investor relations website.
It's another knock for Tesla as analysts warn this week's quarrel between Musk and the president, who Musk donated $288 million last year to help elect alongside other Republican candidates, could further weigh on Tesla, which is already grappling with declining brand sentiment on the left, historically the base for EV purchasers.
This disagreement 'could potentially (temporarily) alienate multiple sides of the political spectrum," warned Morgan Stanley analyst Adam Jonas in a Friday note.
Tesla stock bounced back Friday, gaining 6% by early afternoon as part of a broader rally. That only recovered a small portion of Thursday's historic loss, as the Musk-led firm's share price is down 9% since Wednesday. The Musk-Trump division "clearly raises the degree of [near-term' uncertainty' for Tesla, according to TD Cowen analyst Itay Michaeli.
Amid the kerfuffle, Trump threatened to cancel all of the federal government's contracts with Musk's portfolio of companies. That would likely impact the private aerospace and communications firm SpaceX far more than Tesla, which does not rely on government contracts for a significant portion of its revenues, but there is a way Trump could target Tesla's bottom line directly. Trump could restrict Tesla's ability to sell its automotive regulatory credits, according to Morningstar strategist Seth Goldstein, referring to the essentially free profit Tesla gets from selling its emissions credits to gas-powered automakers. That could dramatically reduce Tesla profits, as it reported $595 million in those regulatory credits compared to a $934 million net income during 2025's first quarter, meaning the credits directly contributed about two-thirds of its net profit.
Since Musk announced his purchase of Twitter (now X) in 2022, Tesla stock has frequently faced downward pressure as its top decisionmaker and shareholder Musk became increasingly outspoken on politics to much controversy. Musk endorsed Trump in July and rose to become perhaps the most prominent and powerful figure in the early days of Trump's second administration, though the perceived impact of Musk's buddying up to Trump turned negative this year as sales globally for the automaker tumbled. In a further sign of fray in the relationship between Musk and Trump, the president has decided to sell his Tesla Model S, according to the New York Times.
Tesla is expected to report its Q2 delivery numbers July 2.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Fox News
34 minutes ago
- Fox News
Will Rubio move to ban Chinese students from the US?
All times eastern FOX News Radio Live Channel Coverage WATCH LIVE: Protest erupts after immigration raid, police in standoff
CBS News
34 minutes ago
- CBS News
Police cast wide net in probe of defunct North Texas car dealership's business practices
Desire Godfrey said it was time for a vehicle upgrade. The Lancaster mother had her eye on a Lexus. "I had a baby, so I'm looking for something reliable for me and a baby," Godfrey said. She searched online and found what she thought was the right vehicle at The Reserve Auto Group in The Colony. She described the sales process in May 2024 as a positive experience. Warranty and GAP insurance issues But an unexpected oil change six months later changed everything. Godfrey, 33, said a Lexus dealership informed her the vehicle was not under warranty. She also discovered her GAP insurance policy didn't exist. "They (Reserve Auto Group) never paid the warranty company the money they were supposed to pay to activate this warranty and this GAP insurance," she said. Car loan charges continue Godfrey said the costs were included in her car note. She filed a report with The Colony Police Department — and she's not alone. Police said they received their first complaint on Jan. 31. According to a news release, police have been investigating multiple fraud claims connected to the dealership since 2023. The business shut down in December 2024, but complaints continue to come in. Alleged auto fraud pattern Investigators said customers were allegedly instructed to write separate checks for aftermarket warranties or GAP insurance policies. Those payments were supposed to go to third-party providers, but police said the dealership allegedly cashed the checks and never forwarded the money — leaving customers without coverage. Another victim comes forward A second alleged victim, who spoke to CBS News Texas anonymously, said she and her husband also bought a Lexus from the dealership. She provided a non-activation letter from DOWC Administrative Services LLC, a company that offers GAP insurance and warranties. The letter stated: "Please be advised that Reserve Auto has failed to remit payment to Us as the Administrator and Provider for your Contract. Consequently, the Contract was not activated in our system." Investigation still ongoing Police have not made any arrests or publicly identified anyone associated with the allegations. Officers said they are continuing to vet additional alleged victims. CBS News Texas is not naming the person listed as the dealership's owner, as police have indicated he did nothing wrong. He spoke briefly by phone, saying he wanted to schedule an appointment to discuss the claims further because he believed "we did not have all the facts." When asked for clarification, he said he didn't have time to explain. Legal team responds Two emails followed the call, and attorneys from Herrin Law introduced themselves. "We have no comment at this time. Thank you for your interest in our client's side of the story," attorney Benjamin Palatiere said. He requested that all future inquiries be directed to him. Buyer left without coverage Meanwhile, Godfrey said the vehicle itself has not had any issues. But she continues to pay for a warranty and insurance that don't exist. "So nobody wants to refinance the loan. Nobody wants to give me GAP insurance," she said. "It's just more so like I'm going to take it or leave it. If I wreck the car, then I would have to figure out a way to pay that car off." Godfrey said she hopes to recover the money one day.
Business Insider
36 minutes ago
- Business Insider
REV Group price target raised to $34 from $30 at Goldman Sachs
Goldman Sachs analyst Jerry Revich raised the firm's price target on REV Group (REVG) to $34 from $30 but keeps a Sell rating on the shares. The company's Q2 results revealed higher Fire business throughput and cost control amid strong production performance in Specialty Vehicles, the analyst tells investors in a research note. The firm adds however that REV's Recreation segment EBITDA was only in-line, with lower margins driven by lower units. Confident Investing Starts Here:
