JPMorgan Issues Ultra-Bearish Forecast: Tesla Stock Predicted to Plunge 60% by Year-End—But Why?
Tesla’s stock has already dropped 20% this year, making it the worst performer among the "Magnificent Seven." Now, JPMorgan is issuing a fresh warning to investors: prepare for even steeper declines ahead.
Tesla’s struggle in April began with a disappointing first-quarter delivery report. The EV maker sold just 358,000 vehicles during the quarter—4% below analyst expectations and 7% lower than JPMorgan’s own forecast of 385,000 units.
While Tesla's Q1 deliveries grew 6.3% year-over-year, this growth came off a relatively low base from the previous year. More concerningly, it represented a significant sequential decline from the record delivery numbers seen in the fourth quarter of 2025.
These figures prompted JPMorgan analyst Ryan Brinkman to reiterate his "Underweight" rating, setting a year-end price target of $145—nearly 60% below Monday's closing price.
Record Inventory Levels: The Core Bear Case
The heart of JPMorgan’s bearish thesis lies in Tesla’s surging levels of unsold inventory.
"A massive spike in unsold new vehicle inventory is further straining Tesla’s free cash flow," the bank noted in its report. "In Q1 2026, Tesla produced 50,363 more vehicles than it delivered, marking the largest single-quarter inventory buildup in the company's history."
Brinkman highlighted a stark disconnect: since the first quarter of 2023, Tesla’s production has ramped up by 80%, while actual vehicle sales have slumped by 15% over the same period.
He further noted that while Tesla’s delivery growth arguably peaked back in early June 2022, the stock price has risen approximately 50% since then. This decoupling of share price from fundamentals suggests that Wall Street is pricing in a narrative that has yet to materialize. As core auto sales falter, investors are pinning their hopes on speculative projects like Robotaxis and humanoid robots.
A "Perfect Storm" of Headwinds
Tesla is currently facing a series of significant obstacles. Late last year, the Trump administration repealed the $7,500 federal EV tax credit, dealing a heavy blow to domestic demand. Simultaneously, persistently high interest rates have driven up financing costs for prospective car buyers.
Meanwhile, competition is intensifying. Tesla is under immense pressure from Chinese rivals like BYD, as well as legacy automakers including Mercedes-Benz, GM, and Ford, who are fighting for market share.
It is worth noting that Brinkman’s target is an outlier on Wall Street, where the average price target for Tesla stands at $360.
However, JPMorgan is not the most bearish voice in the room. Recently, HSBC analyst Michael Tyndall reaffirmed an "Underweight" rating with a 12-month price target of $131, suggesting the floor may be even lower.