A disappointing start to the year for the electric vehicle manufacturer (EV) could only get worse, as Tesla (TSLA) stock could see 40% of profits disappear in 2025, according to JPMorgan. Indeed, the institution has expressed some concern regarding what could be on the horizon when US President-elect Donald Trump takes office next year.
The Elon Musk-led company skyrocketed after Trump emerged victorious in the 2024 election. Just one month prior, the company unveiled its highly anticipated Robotaxi product line. With autonomous vehicles set to be a critical part of its business model, there is a lot that is on the line as it enters a critical 2025.
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JPMorgan Warns 40% of Tesla Profits in Trouble in 2025
Throughout the last several months of 2024, Elon Musk joined Donald Trump on the 2024 campaign trail. In response, the Tesla CEO was made head of Trump’s Department of Government Efficiency Commission (DOGE), in a move that many thought would be a good one for Musk’s various entrepreneurial endeavors.
However, that may prove to not be the case. Indeed, Tesla stock may be in trouble, as JPMorgan has predicted profits will evaporate in 2025. Specifically, the bank has stated that the EV manufacturer will lose around 40% under the incoming Trump administration, according to a Business Insider report.
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The projection comes amid Trump’s seeking to remove EV tax credits that help incentivize the purchase of Tesla Moreover, the increased risks take place as Tesla has already gotten off to a shaky start to the year. The company reported a drop in annual vehicle sales for the first time in a decade.
“Tesla does not appear to us on track to dominate the global auto industry amidst the electrification transition, which we view as only the starting point for present valuation,” JPMorgan analyst Ryan Brinkman notes.
For Musk, the Robotaxi is still the focus for Tesla. However, regulatory concerns still make the path to its arrival cloudy. If Musk can orchestrate political intervention, he could fast-track its arrival. The mainstream adoption of the technology could see Tesla skyrocket. Until then, the concern over EV sales remains undeniable.
