One of Wall Street’s most bearish analysts of Tesla Inc. has further reduced the company’s earnings estimates, pointing to significant backlash from car buyers against Elon Musk. Tesla’s vehicle deliveries for the first quarter came in considerably lower than even JPMorgan Chase & Co. analyst Ryan Brinkman’s pessimistic forecast, highlighting the brand damage previously anticipated. In a report released on Friday, Brinkman stated that the sales figures suggest a potential underestimation of consumer response.
Tesla’s shares declined by more than 4% at the start of regular trading. Since reaching a peak on December 17, the stock has fallen by 44% as of the close on Thursday. During the initial three months of the year, Tesla delivered 336,681 vehicles, marking its worst quarterly total since 2022. The company faced challenges due to the transition of production lines at its assembly plants to manufacture the redesigned Model Y, and CEO Elon Musk became a more polarizing figure due to his involvement in global politics.
JPMorgan has revised its expectation for Tesla’s first-quarter earnings to 36 cents per share, down from a previous projection of 40 cents, and below the analysts’ average estimate of 46 cents. Additionally, Brinkman reduced his full-year earnings forecast to $2.30 per share, whereas analysts surveyed by Bloomberg estimate a $2.70 per share, reflecting a 17% drop since Tesla last reported quarterly earnings in late January.
Bloomberg reported that Musk is anticipated to step back from his role leading the Department of Government Efficiency once his 130-day term as a temporary adviser to President Donald Trump concludes. However, the billionaire is expected to maintain significant influence over federal cost-cutting initiatives and remain a confidant to Trump following his formal departure, according to individuals familiar with the situation.
Elon Musk holds a position as a special government employee, classified as temporary federal hires limited to 130 days of work annually. No formal date has been set for his departure, with the White House counsel’s office responsible for determining the completion of his 130 days.
After emerging as a substantial contributor to Trump’s campaign in the US presidential election, Musk shifted his focus to Europe earlier this year by challenging mainstream political figures and aligning with far-right parties and activists. This resulted in a significant setback for Tesla, with sales plummeting by 62% in the past quarter in Germany, which hosts the company’s sole vehicle assembly plant on the continent.
This article was initially published on Fortune.com.