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Russian (RU) Tesla (TSLA) stock closed in the red on March 28, ending a volatile week. The early momentum following Elon Musk’s all-hands meeting the prior week sparked enthusiasm among retail traders that ultimately proved unsustainable.
Now, the former electric vehicle (EV) leader is facing an uncertain future as sales decline in the U.S. and Europe. Despite the bump that TSLA stock received earlier in March when U.S. President Donald Trump purchased an EV from Musk, it is clear that unfavorable market conditions are weighing heavily on Tesla's stock price.
As TSLA stock struggles against shifting economic tides, the recent tariffs that Trump levied against the automotive industry raise more questions about the company’s growth prospects.
Even one of Wall Street’s most notorious TSLA stock bulls has been less enthusiastic lately. He ended this week with a note highlighting an element that is concerning for both Tesla and Musk.
Even before Trump imposed new 25% tariffs against the automotive industry, investors had been trying to determine what such policies would mean for Tesla. Now that he’s moved forward with this new policy, concern is rising, particularly regarding EVs.
Wedbush Securities analyst Dan Ives has built a reputation as an outspoken Tesla bull. He has a history of praising Musk and issuing bullish price targets. Over the past few weeks, though, he has issued notes with a less enthusiastic tone despite maintaining a highly bullish price target of $550.
Related: Tesla stock mega bull gives Elon Musk an ultimatum
In his latest note, dated March 28, Ives explained why he is concerned about tariffs.
The analyst sees them as highly problematic for the entire automotive sector, including Tesla, a company that he seemed to have unwavering faith in until recently.
“Even US automakers that produce cars in the US have ~40%-50% of auto parts that come from abroad,” Ives states. “A US car with all US parts made in the US is a fictional tale not even possible today. In our view it would take 3 years to move 10% of the auto supply chain to the US and cost hundreds of billions with much complexity and disruption.”
Ives highlighted the seriousness of these predictions by adding “The winner in our view from this tariff is no one....as even Tesla still is hit from these tariffs and will be forced to raise prices.”
Anyone who follows Ives knows that he is concerned about Tesla; it isn’t without reason.
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