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A major Tesla bull is starting to wonder.

Stocks were rising on Wednesday after an encouraging inflation report, with beaten down technology stocks leading the rally. Most notably, Tesla (Nasdaq:TSLA), which has been in freefall for the past couple of months, was up about 8% in early trading.

It was the second day in a row that Tesla stock was heading higher. On Monday, Tesla gained about 3%, perhaps propelled by the unusual scene at the White House where President Donald Trump and Tesla CEO Elon Musk were showcasing various Tesla models.

Trump wrote on Truth Social that he was “going to buy a brand new Tesla tomorrow morning as a show of confidence and support for Elon Musk, a truly great American.”

Musk told reporters on the South Lawn that he wanted to thank Trump for his support.

It was an event unlike just about anything seen at the White House. But Trump said the show of support for Musk and Tesla comes at a time when Tesla stock has been plummeting, Tesla sales have been dropping, and there have been nationwide boycotts of Tesla, primarily due to Musk’s role in slashing federal budgets as part of Trump’s Department of Government Efficiency.

It has caused concerns about the future of Tesla from investors, as well as some leading Wall Street analysts.

Tesla stock down 50% from highs

Even with today’s gains, Tesla stock is down about 38% YTD to around $243 per share, and roughly 50% since it hit a high of $484 on December 18, after he helped Trump win the presidency.

Plummeting sales have hurt the stock, as Tesla reported a decline in deliveries in 2024, the first time that has happened in 10 years. Further, automotive revenue was down 6% in 2024.

Reports so far in 2025 show sales are even worse. A recent report from Australia said Tesla sales are down 35%. Europe and China have also reported steep sales drops, and California, the largest U.S. market, has also seen declines.

But the bigger longer-term issue may be the brand. The Tesla brand has taken a major hit due mainly to Musk’s involvement in politics, according to a recent survey by EV site Electrifying.

The Electrifying survey, published January 27, said 60% of car buyers say Musk’s controversial reputation actively puts them off buying a Tesla. Those results include both EV owners and those looking to make the switch to EVs. This is in addition to the protests, and in some cases vandalism, that has occurred in recent months.

Tesla Bull is concerned

Analysts still rate Tesla as a consensus buy, with about 48% calling it a “buy,” 29% rating it as a “hold,” and 22% calling it a “sell.” It has a median price target of $390 per share, which suggests 61% upside over the next 12 months.

Wedbush, one of the Tesla’s biggest bulls, said less than 5% of Tesla sales are at risk from Musk concerns. But Wedbush analyst Dan Ives, a Tesla bull, said investor patience is growing thin.

In a research note, reported Yahoo, Ives said Musk’s foray into politics has damaged the brand. At the same time he is “showing no attention to Tesla during this turbulent time,” said Ives.

“Becoming a political object is a dangerous path,” Ives said, reported Yahoo.

Ives said the next few months for Tesla and Musk will be critical, calling it a moment of truth.

“As someone who’s covered Tesla for many, many years, it was time to communicate to Musk and the board what Tesla shareholders are telling us: Balance your time. Show that you are Tesla CEO,” Ives said, reported Yahoo. “This is not the time to just play in the DOGE sandbox. He needs to step up.”

On top of that, a major problem is the stock is still ridiculously overvalued with a sky-high P/E ratio of 113. Even after this huge drop, the P/E is still too high, spurred by the huge election run up.

Investors should be very cautious of that high valuation, as Tesla stock, politics aside, is finding its level amid potential sales declines.

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