Tesla’s Future Remains Bright Despite Stock Decline, Says Wedbush

Tesla (NASDAQ: TSLA) remains on track for long-term growth despite recent stock struggles, according to Wedbush. The firm reaffirmed its bullish outlook, citing Tesla’s advancements in autonomous driving and CEO Elon Musk’s growing influence in the Trump administration as key drivers for unlocking a $1 trillion valuation.

Tesla plans to launch its long-awaited mass-market EV in early 2025, alongside major developments in full self-driving (FSD) and its Optimus robot. The company is also working on expanding its EV and battery technologies, which could serve as catalysts for future growth.

Wedbush expects Tesla to secure exemptions in ongoing U.S.-China tariff talks, as the escalating trade war poses risks to its operations. China remains a critical market for Tesla, but increasing competition from local automakers like BYD (SZ:002594) is intensifying pressure. BYD’s recent unveiling of budget-friendly autonomous vehicles, starting at $10,000, adds to the challenge.

Tesla has been the worst-performing stock among the "Magnificent 7" in 2025, dropping 11% while the S&P 500 rose 3.1%. Concerns over Musk’s divided focus—balancing Tesla, SpaceX, X, and his advisory role in the Trump administration—have contributed to the selloff. Additionally, his political alignment is reportedly alienating European customers, leading to declining deliveries in key markets like France and Germany.

Despite these concerns, Wedbush believes the brand impact is manageable and maintains its Outperform rating for Tesla, with a $550 price target. The firm sees long-term potential in Tesla’s EV and AI advancements, keeping its growth trajectory intact.