Musk-Trump Clash “Raises the Degree of Near-Term Uncertainty” for Tesla, Says Analyst

TD Cowen analyst Itay Michaeli believes that the public feud between Tesla (TSLA) CEO Elon Musk and U.S. President Donald Trump clearly increases uncertainty for TSLA stock in the short term. The analyst is particularly concerned about how “political developments” could negatively impact Tesla’s sales.

Michaeli has a “Buy” rating on TSLA stock and a $330 price target, which implies 15.9% upside potential from current levels.

Too Early to Determine the Feud’s Lasting Impacts

The analyst noted that following yesterday’s spat, there are more questions than answers about Tesla’s future, and it is too early to determine any lasting impacts from the events. He added that investors will closely watch the execution of Tesla’s near-term deliverables, such as the robotaxi launch in Austin, Texas, slated for June 12. Additionally, Tesla could witness “political-related vehicle demand shifts,” Michaeli added.

It is worth noting that Michaeli made some interesting observations about Tesla’s auto sales based on the country’s political divide, which he said began in Q1 of fiscal 2025. To start, the analyst stated that 35% of Tesla’s U.S. sales come from Republican-leaning counties, while the majority 65% come from Democratic-leaning counties. Of these, he noted that 12% of the Republican counties are characterized “Deep Red,” representing strong support for Trump, while 36% of the Democratic counties are classified as “Deep Blue,” indicating strong support for Democratic parties. Notably, both the “Deep Red” and “Deep Blue” characterized counties could impact Tesla’s future auto sales.

Will the Trump-Musk Spat End Today?

Trump and Musk traded spiteful accusations yesterday, each trying to undermine the other’s credibility. The President even threatened to cancel billions of dollars in government contracts awarded to Musk’s companies, especially SpaceX. While these threats were made in a moment of anger, they could still affect Tesla’s business in the future.

Meanwhile, a report from Politico noted that White House staff had arranged a phone call with Musk to help ease escalating tensions between the CEO and the President. Although TSLA stock is rising in pre-market trading on the news, critics believe that the damage may already have be done.

Is Tesla a Buy or Sell Today?

Analysts currently prefer to remain sidelined on Tesla’s stock due to ongoing challenges. On TipRanks, TSLA stock has a Hold consensus rating based on 16 Buys, 10 Holds, and 11 Sell ratings. The average Tesla price target of $282.70 implies that shares are almost fully valued at current levels. Year-to-date, TSLA stock has lost 29.5%.

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