On Monday, March 10th, Tesla Inc. saw a significant 15% drop in its stock price, marking the largest single-day decline in over four years, continuing its downward trend since 2025.
In the past three months, Tesla’s stock price has nearly halved, erasing the gains made since Donald Trump’s presidency. The company’s market value reached a historic high of $1.5 trillion last December but has now dropped by around 45% from that peak.
Wall Street analysts have recently slashed Tesla’s delivery expectations, further deepening concerns in the market about its future growth potential. On Monday, Tesla’s stock plummeted by 14%, mainly due to UBS Group AG analyst Joseph Spak lowering the first-quarter and full-year delivery forecasts for Tesla.
Spak now predicts that Tesla’s first-quarter deliveries will only reach 367,000 vehicles, a significant 16% decrease from previous estimates. Additionally, he no longer expects Tesla’s sales in 2025 to surpass those of 2024, instead estimating a year-on-year decline of about 5%.
Ben Kallo, an analyst at Robert W. Baird & Co., also lowered his delivery forecast for Tesla on March 6th.
Spak noted in his report to clients, “While we do believe the Model Y refresh will help volumes, we believe demand remains soggy.” He specifically pointed out that according to data from Tesla’s China website, the delivery time for the new Model Y is only two to four weeks, indicating that market demand may be weaker than anticipated.
However, according to analysts surveyed by Bloomberg, the market still generally expects Tesla’s full-year deliveries to grow by about 10%, and Tesla executives have emphasized that the company is poised to return to a growth trajectory in 2025.
Tesla’s recent sales slump is not only due to the short-term impact of new model changes but also influenced by CEO Elon Musk’s political activities and intensifying market competition.
In early 2024, Tesla saw a 70% drop in electric vehicle registrations in Germany, partly attributed to Musk’s public comments on the German federal elections, which sparked consumer resistance.
In China, the world’s largest electric vehicle market, Tesla is facing economic downturns and fierce competition from local brands like BYD. In February, shipments from Tesla’s Shanghai factory plummeted by 49%, delivering only 30,688 vehicles, marking the lowest record since July 2022.
Market concerns about Musk’s political activities’ impact on corporate governance are also increasing. Some investors worry that Musk’s public intervention in federal government layoffs and his deep involvement with the Department of Government Efficiency (DOGE) could affect his management of Tesla and thereby influence business operations.
While electric vehicles account for the majority of Tesla’s revenue, according to Reuters’ analysis of over a dozen banks and investment institutions, its electric vehicle business represents less than a quarter of Tesla’s stock valuation.
Furthermore, Tesla’s price-to-earnings ratio (P/E) remains significantly higher than tech giants such as Nvidia, Apple, Meta (Facebook), Alphabet (Google’s parent company), Amazon, and Microsoft. These six companies, along with Tesla, are collectively known as the “Magnificent Seven,” which have been supporting the strength of the US stock market in recent years.
Despite the current challenges facing Tesla, some investors still have confidence in its long-term growth potential, believing that Tesla is not just an automaker but a pioneer in artificial intelligence (AI) technology. They anticipate that Tesla will bring revolutionary changes in the fields of autonomous robotaxis and humanoid robots in the future.
(This article drew references from reports by Reuters and Bloomberg)