UBS Slashes Tesla Target, Downgrades GM as Tariff Costs Climb

​UBS just sent a warning shot through the auto industry, downgrading General Motors and cutting its price target for Tesla as global trade tensions start to dent the outlook for both companies.

Citing “a more uncertain future,” UBS downgraded General Motors to neutral from buy, lowering its price target from $64 to $51. The firm now estimates GM could face $5 billion in annual tariff-related costs, thanks to the 25% U.S. tariff on all non-U.S.-made vehicles that just kicked in. Analyst Joseph Spak says the automaker will likely try to offset about half of that through higher prices, but warned that could backfire by reducing demand and volumes.

GM’s stock dropped more than 3% in premarket trading following the call and is now down 14% year-to-date. UBS also said GM may have to withdraw its 2025 guidance due to the escalating uncertainty, despite expecting a solid Q1 earnings beat on April 29.

Tesla didn’t get a pass either. Spak cut his Tesla price target to $190 from $225—a roughly 30% drop from its current level—and reiterated a sell rating. He warned that investor expectations for 2025 earnings are still too high and due for further downward revisions after Q1 results. Tariff impacts on Tesla’s energy business, particularly from China, add to the concern.

Tesla shares are already down 33% this year, and despite a recent bounce, UBS suggests more pain could be coming.

​Bottom line: Between rising input costs and shaky demand, tariffs are becoming a serious drag on automakers’ profitability—and even the bulls are starting to bail.