Tesla stock climbs over 2% in early trading: why this analyst remains bullish

Tesla stock climbed 2.3% to $258.03 in early Monday trading after President Donald Trump announced that smartphones and select electronics would be excluded from the harshest round of import tariffs.

The broader market responded positively, with the Dow Jones Industrial Average rising 510 points, or 0.9%, and the S&P 500 and Nasdaq Composite gaining 1.2% and 1.5%, respectively.

The rebound offers some relief to Tesla shareholders, who have endured a difficult year.

Before today’s recovery, the stock was still down 38% year-to-date and has declined 41% since the January 20 presidential inauguration.

Tesla US sales stumble

Tesla’s US sales dropped nearly 9% in the first quarter of 2025, underperforming the domestic electric vehicle market that expanded by 11%, according to fresh data from Cox Automotive.

The slowdown reflects a shifting competitive landscape as mainstream automakers ramp up production of more affordable, longer-range EV models.

While overall US electric vehicle sales climbed to roughly 300,000 units in the first three months of the year, representing about 8% of new car sales, Tesla’s market share slid to 44%, down from 51% a year earlier.

Buyers have increasingly gravitated toward lower-priced options like General Motors’ Chevrolet Equinox EV, which offers over 300 miles of range at a starting price of around $35,000.

Cox Automotive noted that despite persistent skepticism about EV adoption, the category continues to expand “at a healthy pace” in the US market.

Tesla, however, faces growing pressure not just domestically but globally. The company reported a 13% drop in worldwide deliveries for the quarter, falling to 337,000 vehicles.

On Friday, RBC Capital Markets cut its price target on Tesla stock to $314 from $320, while reiterating an Outperform rating.

Analyst Tom Narayan cited expectations of lower vehicle delivery volumes, which in turn weigh on the valuation of both Tesla’s core automotive business and its Full Self-Driving (FSD) segment.

Anlayst bullish on TSLA stock

On Monday, Cantor Fitzgerald analyst Andres Sheppard reaffirmed an Overweight rating on Tesla stock, addressing the implications of newly announced US tariffs on vehicles and auto parts imports.

In a research note, Sheppard emphasized that Tesla’s strategy of domestic sourcing and extensive vertical integration positions it to weather the tariff measures better than most peers.

According to Sheppard, 61% of Tesla’s US-sold vehicle components are sourced domestically, sharply reducing the company’s exposure to import duties.

“We see it as better positioned and less impacted relative to other OEMs,” he noted, suggesting that Tesla’s supply chain structure offers a strategic advantage in the face of escalating trade restrictions.

Despite maintaining a positive operational outlook for Tesla, Cantor Fitzgerald flagged potential headwinds tied to consumer sentiment.

In its note, the firm acknowledged that Elon Musk’s increasingly polarizing political stances could weigh on demand, particularly in geopolitically sensitive regions like China and Europe.