Tesla's stock price could potentially plummet to $200 due to a significant ETF setback.
In a recent turn of events, the focus on Tesla has intensified following the postponement of the Tesla-focused exchange-traded fund (ETF) by Azoria Partners. The decision comes in response to Tesla CEO Elon Musk's announcement of plans to form a political party, which has introduced significant uncertainty and potential volatility into the market.
The proposed Tesla Innovation ETF, initially planned by investment firm Azoria, has been shelved indefinitely. The firm has taken a cautious approach, choosing to delay the ETF launch to avoid premature exposure to the risks associated with Musk's political ambitions.
Tesla's stock price, however, continues to show strong performance. The company experienced a massive 90% surge in June 2025, driven by strong Q1 earnings, advances in autonomous driving, and positive market sentiment. This rally demonstrates robust investor confidence in Tesla’s business fundamentals despite the political uncertainty.
The technical analysis by TrendSpider suggests that $250 is a significant level for Tesla's price movements. Known as the Point of Control (PoC), this level is the most heavily traded zone over the last five years, drawing strong interest in buying and selling across market cycles. Tesla is currently trading well above the $250 zone, and investors are watching to see whether the stock can hold its ground or slide back toward this crucial support level.
The political developments have sparked concerns among some analysts, who predict that TSLA could slide below $250 or even test the $200 mark if political risks continue and sentiment weakens. These worries stem from mounting concerns about regulatory backlash, potential loss of EV tax credits, and fears that Elon Musk could lose focus on Tesla’s core business due to his political involvement.
The rift between Elon Musk and President Donald Trump has also been a contributing factor. Trump has threatened to revoke federal subsidies and SpaceX contracts if Musk pursues his political agenda. Azoria CEO James Fishback, a vocal Trump supporter, has criticized Musk in a series of posts.
Despite the political turmoil, some investors remain optimistic about Tesla's future. Fishback has called on Tesla's board to reassess whether Musk's political involvement is compatible with his role as CEO. However, the bearish sentiment towards TSLA is growing, with some analysts urging caution in the face of mounting political risks.
As the situation unfolds, investors will likely remain attentive to both Tesla’s business progress and Musk’s political trajectory for cues on future market impacts. Tesla shares closed at $315.35 on Friday, slightly off their weekly high of nearly $320. The coming weeks are expected to provide further insight into how the market will react to the combination of Tesla's operational achievements and the ongoing political drama.
- Investors, keen on observing Tesla's future, will likely consider both its business advancements and Elon Musk's political journey as potential indicators for market reactions.
- Despite the impressive 90% surge in Tesla's stock price, some analysts foresee risks looming due to political uncertainties, potentially causing Tesla's shares to retract towards the $250 level, a significant support zone identified by technical analysis.
