Tesla (TSLA) could be headed for financial turbulence, according to a J.P. Morgan analyst, who warns that the proposed “Big, Beautiful Bill” may pose a major threat to the EV giant’s earnings. The bill, backed by President Donald Trump, seeks to eliminate key EV tax credits and regulatory incentives. These changes could significantly dent Tesla’s bottom line.
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For context, the “One Big Beautiful Bill Act” (OBBBA), introduced by House Republicans in May 2025, seeks major tax and spending reforms. The bill scales back or eliminates EV and clean energy credits from the Inflation Reduction Act. The proposed elimination of EV tax credits is particularly concerning for automakers like Tesla.
What It Means for TSLA Stock
After a steady rise in May, Tesla stock is facing a downturn in June, dropping over 5% so far this month. TSLA fell more than 3% on Wednesday and slipped over 1% in pre-market trading on Thursday.
According to J.P. Morgan’s analyst Ryan Brinkman, the road ahead could get even bumpier for the stock, as reported by The Street. Brinkman believes that the proposed bill could deal a major blow to Tesla’s bottom line by scrapping vital tax incentives and regulatory programs that have supported the company’s profitability.
Brinkman further warned that if the bill becomes law, the EV maker could take a $2 billion hit, which is about 33% of its EBIT (earnings before interest and tax). He pointed out that the bill would scrap the $7,500 federal EV tax credit that buyers receive. This could significantly impact EV sales, as the tax credit has been a substantial incentive for consumers.
Overall, Brinkman has assigned a Sell rating to TSLA stock, forecasting a potential 65% decline from current levels.
Is Tesla a Buy or Sell?
On Wall Street, analysts have maintained a neutral stance on Tesla stock. According to TipRanks, TSLA stock has received a Hold consensus rating, with 16 Buys, 10 Holds, and 11 Sells assigned in the last three months. The average Tesla stock price target is $282.70, suggesting a potential downside of 15% from the current level.
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