Tesla’s stock kicked off the week on a sharply negative note, falling more than 15% on Monday and making it the worst performer on the S&P 500. This steep drop erased all the company’s post-election gains and further fueled concerns among investors about the EV maker’s trajectory.
A Seven-Week Losing Streak
Tesla’s stock has been in a downward spiral for the past seven consecutive weeks, with Monday’s drop marking its lowest levels since late 2024. The shares, which previously peaked at a record $479.86 in December, have now declined by over 50%. Tesla’s market capitalization is estimated to have plummeted to roughly $840 billion, according to data from Visible Alpha.
Why Did Tesla Stock Tank?
The significant decline in Tesla’s stock price has raised numerous questions, with several key factors contributing to investor concerns:
- Uncertainty Around Tariffs
Ongoing worries about potential tariffs under the Trump administration are placing additional pressure on Tesla’s business operations, especially in global markets.
- Weak Sales in Key Markets
Tesla is facing declining registrations in Europe and sluggish sales in China, two of its most lucrative regions.
- Brand and Leadership Challenges
CEO Elon Musk’s involvement in the Trump administration further complicates the situation, with some investors and analysts speculating its potential impact on the Tesla brand and its customer base.
- Lower Delivery Projections
UBS analysts, who maintained a “sell” rating on Tesla, lowered their first-quarter delivery estimates from 437,000 to 367,000 vehicles. They attributed this adjustment to muted demand for the new Model Y and anticipated lower margins on a forthcoming budget-friendly model.
Divided Opinions Among Analysts
Analysts remain split on Tesla’s future. According to Visible Alpha, ten analysts have issued “buy” ratings, five recommend “hold,” and four suggest “sell.” While some experts believe Tesla’s new vehicles could revitalize sales, others argue that challenges such as growing competition and eroding market sentiment could keep pressure on the stock.
A Long Road Ahead
Tesla’s recent performance raises critical questions about its growth prospects and ability to withstand market headwinds. While its innovative models and global presence remain strong, the company’s challenges in both its markets and leadership are areas that investors will continue to scrutinize.
With Tesla’s stock price in flux, the coming weeks will be crucial to understanding whether it can recover from this steep decline or if further turbulence lies ahead for shareholders.
For investors keen on staying ahead of market developments, keeping a close watch on Tesla’s quarterly reports and market trends will be essential.
