Tesla’s rough ride has just gone from bad to worse.
After rising over 60% in 2024, shares of Elon Musk’s EV company have plummeted 35% so far this year, sliding for seven weeks straight, and wrapping today’s trading session down 15.43%—the stock's worst day since 2020.
Although Musk tried his best to pump up the sputtering stock by posting on X that Tesla’s profits could soar 1,000% in the next five years, no one’s buying it—especially now that President Trump won’t rule out a recession.
This once high-flying EV manufacturer seems to be suffering from neglect as its CEO focuses on all things DOGE. Even the public at large seems to have shifted its attention: Google searches for “DOGE” peaked, and even surpassed, searches for “Tesla” late last month. Shareholders can't be too happy about that.
Given Tesla’s troubles, any investor left holding the bag may be wondering: Should they drop the stock before things get even worse, or does this selloff make it a bargain worth buying?
Where is Tesla heading next
While the general consensus among investors seems to be that Musk’s distraction is hurting the stock, there are some very real problems under Tesla’s hood.
For instance, February delivered a stunning slump in vehicle deliveries around the globe: Tesla sales in China sank 49.16% last month, fell 71.9% in Australia, and plummeted 76.3% in Germany.
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Wall Street has taken note. Earlier today, UBS analyst Joseph Spak lowered his first quarter vehicle delivery forecast from 437,000 to 367,000, and shifted his fiscal 2025 expectations lower as well. He also dropped his price target for Tesla from $259 to $225.
“Even if Musk could magically erase the political backlash impacting Tesla sales, competition in the sector would still exist,” wrote Futurum Research Director Olivier Blanchard. “Tesla initially capitalized on first-mover advantage, but those days are over. The EV segment is still growing, but Tesla's share of it is shrinking. Chinese companies are offering equivalent or better options for the price. Tesla fired its magic bullet last year lowering pricing for some of its models to within 1% of margins just to make volume. That strategy is not repeatable. The spiral will level out, but I expect these numbers to continue being the trend for Tesla for the foreseeable future.”
Protests have broken out at Tesla dealerships across the country over the last few days. While many of those protesters were angered by Musk’s recent politicization, there were probably quite a few Tesla shareholders picketing as well.—JD