US President Donald Trump’s latest tariff orders have hit electric vehicle giant Tesla, causing a 5% drop in its shares. The company produces a significant portion of its cars in China, making it vulnerable to the tariffs imposed on goods from Mexico, Canada, and China.
Tesla is facing near-term headwinds due to the high competition in the EV market, affordability issues, and uncertainty surrounding tariffs. However, the company’s energy generation and storage business has been a standout performer, with revenues growing at a triple-digit compound annual growth rate over the past three years.
Analysts are losing confidence in the stock as seen in declining estimate revisions, making it challenging to justify the company’s lofty valuation. With meaningful revenues from autonomous driving and robotaxi ambitions still years away, investors should exercise caution before betting on Tesla.
The company’s financial performance will depend almost entirely on its core EV business for at least the next 12 months, making it essential to assess the current market conditions before considering an investment. Given the current circumstances, we recommend avoiding Tesla for now due to its Zacks Rank #5 (Strong Sell).
Source: https://finance.yahoo.com/news/trumps-tariffs-hit-tsla-hard-155300458.html