On March 20, 2025, U.S. Commerce Secretary Howard Lutnick made a bold statement urging Americans to invest in Tesla stock, drawing both enthusiasm and skepticism from the financial community.
Lutnick, during a TV appearance on Fox News, confidently proclaimed, "If you want to learn something on this show tonight, buy Tesla. It's unbelievable that this guy's stock is this cheap. It'll never be this cheap again." His comments come amid considerable turmoil for the electric car manufacturer, which has seen stock values plummet significantly over the past months.
Currently, Tesla shares are struggling in the market, down about 1.7% in premarket trading, sitting at $231.75 as of Lutnick's comments. This decline follows a staggering 42% drop in share price since the start of the year. Analysts at J.P. Morgan noted that this drastic reduction is unprecedented in the automotive industry, highlighting the critical pressures the company faces. The report states, "We struggle to think of anything analogous in the history of the automotive industry, in which a brand has lost so much value so quickly."
Lutnick's statements are considered unconventional for a commerce secretary, as cabinet officials rarely recommend individual stocks, especially those linked to close presidential advisors like Elon Musk. Musk, who has served as an advisor to former President Donald Trump, has also been facing backlash over his handling of protests at Tesla showrooms across the nation.
In the past few weeks, Tesla has been subjected to protests that have raised tensions regarding its reputation and sales. These demonstrations have led Musk to voice his frustrations, stating that it has been shocking to witness violence and hatred directed at his company from the political left. During a recent interview on Fox News, he stated, "Tesla is a peaceful company. We have never done anything harmful. I have never done anything harmful, only done productive things."
The political implications of Lutnick's endorsement were further underscored by a public Tesla showcase held at the White House a week prior. President Trump expressed his support for Musk by purchasing a Tesla Model S during the event, promoting it as a "show of confidence and support for Elon Musk, a truly great American." Such actions and endorsements indicate an underlying strategy to boost confidence not only in Tesla but also in Musk as a key figure within the administration.
As Lutnick's endorsement resonates, some analysts are starting to voice warnings. Notably, Dan Ives, a prominent Wall Street analyst with Wedbush Securities, described the current scenario for Tesla as a "crisis." He urged Musk and the board to take action and address the company's challenges promptly. "Lets call it like it is: Tesla is going through a crisis and there is one person who can fix it....Musk," Ives asserted in a recent research note. His call to action emphasized the necessity for immediate resolution to support Tesla’s future.
Despite the enthusiasm from Lutnick, the ongoing decline in Tesla’s stock price raises a significant question: is now truly the right time to invest? Financial experts remain divided. While Lutnick suggests that this may be the lowest point for Tesla shares, others caution that the company still faces substantial risks, including competition and market volatility.
Investors are grappling with mixed messages from the market. On the one hand, Lutnick’s endorsement has potential to reignite interest in Tesla as a viable investment option. On the other hand, the fear stemming from the recent protests and the company's erratic stock performance creates a cautionary tone among many who analyze the automotive industry.
According to sources, Cantor Fitzgerald, the investment bank where Lutnick previously served as CEO, had upgraded Tesla's stock just hours before his comments, which swiftly drew attention to the timing and implications behind his statements. The institution’s upgrade amidst Lutnick’s endorsement has posed questions about potential motivations and the entanglement of politics in financial markets.
In retrospect, many market watchers view Lutnick’s call to action as an attempt to align political backing with economic investment, striving to bolster Musk’s waning credibility during a demanding period. As political support coalesces around Tesla, it hypothetically sets the stage for a significant shift in investor sentiment, but for now, the market’s complexities leave many wondering how closely these endorsements will reflect in actual stock performance.
As Tesla looks to navigate its tumultuous present, Lutnick’s urging to invest may not just influence corporate recovery efforts but could also redefine the relationship between politics and market advisement in modern America. The coming days and weeks will reveal how Lutnick's assertions and the political landscape play into Tesla's future.
