Tesla shares declined around 2% in early trading Wednesday to around $249, with broader markets also under pressure.
The Dow fell 180 points, or 0.4%, while the S&P 500 and Nasdaq dropped 0.97% and 1.73%, respectively.
Investors remain focused on tariffs, protests, and upcoming earnings, but concerns about the impact of President Donald Trump’s trade policies on Tesla’s business in China are also in play.
The stock has been volatile in recent months, climbing from around $250 before the election to $480 weeks later on optimism that a second Trump term might accelerate the stock to the moon, thanks to CEO Elon Musk’s close association with the president.
However, the rally faded. Shares fell back to just over $280 by April 2, after weak first-quarter delivery figures raised worries that Musk’s political activity was weighing on Tesla’s reputation.
On a year-to-date basis, the Tesla stock is down over 34%.
Why is TSLA stock down 2% today?
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Today’s fall comes as a Reuters report, citing sources familiar with the situation, said President Donald Trump’s tariffs on China could disrupt Tesla’s plans to scale domestic production of specific products.
As per the report, Tesla’s plans to ship components from China for its Cybercab and Semi electric trucks to the US have been halted after President Donald Trump escalated tariffs on Chinese imports as part of an ongoing trade conflict.
The decision threatens to disrupt Tesla’s timeline for mass production of the highly anticipated models, which CEO Musk has promoted as key growth drivers for the company.
While Tesla was prepared to manage costs under a 34% tariff, the company paused shipments when levies rose further.
Trump raised the reciprocal tariff rate to 84% on April 9, eventually increasing it to 125%, pushing the total duty on Chinese goods to 145%.
Analyst cuts Tesla share price target
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On Wednesday, Piper Sandler lowered its price target on Tesla stock from $450 to $400 while maintaining an Overweight rating.
The adjustment reflects concerns ahead of the company’s first-quarter results.
The firm’s analyst pointed to the absence of details on Tesla’s “Model 2” as adding to the uncertainty around delivery growth.
Without clear specifications or pricing for the upcoming model, forecasting future performance has become more difficult.
The analysts, however, said that the long-term outlook on the stock remains positive.
However, while our 2-3 month outlook leans bearish, remember that TSLA can rally sharply whenever ‘big picture’ catalysts emerge.”
Wall Street’s outlook on Tesla is growing more cautious as trade tensions weigh on the automotive sector.
Last week, analysts at UBS, Goldman Sachs, and Mizuho cut their price targets for the company, pointing to rising tariff risks, weakening demand, and the likelihood of earnings revisions.
