Shares in the electric vehicle maker have soared 31% since Trump’s decisive win, leaving analysts’ price targets in the dust. The gap between Tesla’s share price and the average analyst target compiled by Bloomberg suggests 28% downside, and is at its widest since the post-pandemic tech stock mania of late 2021.

This chasm speaks to the challenge facing analysts as they assess how a Trump administration will affect the company. Musk has been rewarded for his deep-pocketed support with a leading role in a new government efficiency effort, and a potentially friendlier regulatory regime may help his businesses. Still, even some bulls are finding the magnitude of Tesla’s rally tough to justify — especially in light of Trump’s skepticism of electric vehicles.

“The market’s reaction to Trump’s victory has been nothing short of explosive for Tesla, and while there’s certainly potential for benefits under a Trump administration, the current rally seems overheated in the short-term,” said Adam Sarhan, founder and chief executive officer at 50 Park Investments. Sarhan maintains his longer-term bullish view on the company.

Valuing Tesla has always been difficult, leading to big spreads between the lowest and highest price targets on the stock, amid a wider debate on whether it should be treated as a car company, a technology company or some unique amalgamation. More nebulous factors, like Musk’s personal brand, and factoring in the potential from products that aren’t yet on the market, like the so-called robotaxi, add to the challenge.

The post-election rally, coupled with gains following better-than-expected third-quarter results, has pushed Tesla’s already-steep valuation to even loftier levels. The shares were trading at 104 times forward earnings as of Tuesday’s close, far above the mid single-digit multiples of traditional carmakers and the Magnificent 7 group’s average of 32 times.

The implications of a Trump presidency are now throwing up a new valuation conundrum, with analysts assessing all of the political and economic cross-currents that could impact the company’s fundamentals.

Among these are Trump’s threats to reverse EV-friendly policies put in place by President Joe Biden, and the likelihood of a strained relationship with key market China. On a macro level, the possibility of higher inflation caused by some of the policies proposed by Trump may also be a sticking point. Tesla and other carmakers have already suffered a slump in sales in the past few years as consumers pulled back on big-ticket purchases.

On the other hand, some possible Trump policies could be favorable to Tesla, like streamlining federal rules on self-driving cars and support for humanoid robotics that the company is developing, according to Deutsche Bank’s Edison Yu. The company could also increase its already-sizeable lead in EVs.

“Should the Inflation Reduction Act get repealed/changed or extra tariffs get levied for imported parts, Tesla’s relative competitive position would only strengthen,” Yu said. Still, he acknowledged that quantifying exactly how a Trump administration will benefit Tesla “may be more art than science at the moment.”

Morgan Stanley analyst Adam Jonas echoed the sentiment. “It is indeed difficult to quantify whether, and how, Tesla could be affected by Elon Musk’s relationship with the Trump administration,” he wrote in a note to clients this week. “But it is clear the rate of change of Elon Musk’s influence, whether real or perceived, has increased.”

Yu and Jonas both have a buy-equivalent rating on the stock and maintained their price targets in their latest notes.

Tesla shares closed down 6.2% at $328.49 on Tuesday, amid broader signs of cooling of other Trump trades. The stock rose as much as 3.3% in premarket trading on Wednesday after Musk’s appointment — along with entrepreneur Vivek Ramaswamy — to lead the new Department of Government Efficiency.

But with gains since the earnings report three weeks ago now topping 50%, skepticism in some quarters of Wall Street is rising — even if the company does benefit from Musk’s personal relationship with Trump and other factors.

“This rally seems unsustainable, even if you believe in the long-term growth story for the stock,” said David Wagner, portfolio manager at Aptus Capital Advisors, which is a long investor in Tesla. “There has been a renewed memefication of Tesla stock playing into the political momentum, and it makes no sense.”