TheChek News Flow

EV maker has shed nearly half its value but still looks expensive compared with tech and auto peers

Tesla TSLA 7.59%increase; green up pointing triangle is worth nearly half of what it was three months ago. It’s still no bargain.

Shares of the electric-vehicle maker have rallied over the last couple of days, but the stock has been in a mostly downward spiral since hitting a record high in mid-December. Most of that damage has come since President Trump’s inauguration on Jan. 20—the stock lost 38% of its value between then and last week’s close, even before the bruising selloff on Monday. The final bill currently stands around $742 billion in lost market cap since the stock’s peak.

No other major carmaker has fared nearly as badly, even with the prospect of global tariffs that could curb sales across the industry. But no other carmaker is valued as richly as Tesla, with a high-profile CEO who has loudly embraced the most divisive of national politics. Elon Musk’s involvement with the Trump administration has sparked a handful of protests and acts of vandalism at Tesla dealerships across the country, along with several surveys by analysts and market research firms showing damage to Tesla’s brand.

Trump tried to lend a hand Tuesday by promising to buy a new Tesla “as a show of confidence and support for Elon Musk”—one day after the stock experienced its worst single-day drop in nearly five years. But that won’t do much for a company that needs to deliver nearly 1.8 million new vehicles this year just to keep sales flat with last year.

Flat sales also won’t do much to cover a stock that still screens as very expensive even after a blistering meltdown. By Wednesday’s close, Tesla’s stock was trading for 89 times this year’s projected earnings. That is more than double the multiple of the highest valued tech giants that command market caps over $1 trillion. It is also more than triple the multiple that Nvidia now commands, even though Wall Street expects the AI-chip titan to boost revenue by 57% this year compared with 15% revenue growth expected at Tesla, according to consensus analyst estimates on FactSet.

Even that 15% growth is no slam dunk; UBS analyst Joseph Spak cut his 2025 delivery target for Tesla earlier this week and now sees the company’s revenue falling 4% this year, citing internal research indicating “softer demand.”

But Tesla is valued for far more than this year’s sales prospects. Analysts who see the latest selloff as a buying opportunity more frequently tout artificial intelligence, robotaxis and robotics, areas where Tesla is putting a lot of investments but not currently selling any products. In a report Monday, Adam Jonas of Morgan Stanley noted the “buyers’ strike from negative brand sentiment” is weighing on near-term sales. But he kept his price target on the stock at $430—72% above its current price—because of his view of Tesla as an “embodied AI compounder.”

But remember that Tesla still trades at a wide premium to companies with much more established AI credentials. Just being a car company with a foot in the White House doesn’t cut it at that price.

The regulation was expected to drive demand for compliant trucks

Shares in European truck makers fell, with Daimler Truck Holding DTG -5.13%decrease; red down pointing triangle hit the hardest, after the U.S. Environmental Protection Agency said it would reconsider truck-emissions regulations that analysts saw as a source of demand for the industry.

Daimler Truck’s shares were down 7.2% in European midday trading Thursday, having dropped as much as 15% earlier. German peer Traton was down 3.2%, with Sweden’s Volvo down 2.8% and Italy’s Iveco Group IVG -0.33%decrease; red down pointing triangle down 1.3%.

The EPA said Wednesday that it would reconsider Biden-era light-duty and medium-duty regulations and greenhouse gas emissions standards for heavy-duty vehicles. The move was part of an overhaul of U.S. environmental policies, with EPA head Lee Zeldin saying 31 actions had been initiated and were under way.

The potential rollback in 2027 truck emissions regulations means deregulation headwinds begin for the industry, given that this was expected to drive demand for trucks compliant with the regulations, analysts at Jefferies said in a research note.

“If 2027 regulations are rescinded, the prebuy will not happen, in our view, leaving the industry to revert to underlying transport economics,” the analysts said.

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