Tesla Stock Plummets as Sales Decline and Investor Confidence Wanes
Tesla’s stock has taken a steep dive, shedding over 40% of its value since January and wiping out the gains it made after the U.S. presidential election. The decline has also dealt a heavy blow to CEO Elon Musk’s personal fortune, erasing an estimated $121 billion from his net worth in just three months.
The downturn comes amid a combination of faltering global sales, growing competition, and increasing scrutiny of Musk’s controversial public persona.
Tesla Struggles in Key Markets
Tesla’s sales have been on a downward trajectory, with the company reporting its first-ever annual drop in global deliveries last year. The trend has continued into 2025, prompting major Wall Street firms – including RBC, UBS, Goldman Sachs, Mizuho, and JPMorgan – to lower their delivery forecasts.
China, one of Tesla’s most critical markets, has proven especially challenging. The company’s shipments in the country plummeted by 49% year-over-year last month as domestic manufacturers like BYD continue to dominate the electric vehicle sector. BYD recently unveiled a new fast-charging system that significantly outpaces Tesla’s charging speeds, further intensifying the competition.
In Europe, Tesla’s sales have also taken a hit, particularly in Germany, where purchases have slumped by 76% compared to the previous year. The decline follows public backlash over Musk’s reported alignment with far-right political movements, which has damaged the brand’s reputation among European consumers.
In an apparent attempt to revive its struggling market share, Tesla launched a free monthlong trial of its “Full Self-Driving” software in China. However, the announcement did little to reassure investors, with the company’s stock sliding 5% on Monday and another 5% on Tuesday.
Investor Patience Wears Thin
Tesla’s challenges extend beyond its business struggles. Musk’s increasing involvement in political and ideological controversies has raised concerns among investors, with some questioning whether his leadership is hurting the company.
A recent CNN poll found that 53% of Americans now view Musk negatively, and around 60% believe he lacks the experience and judgment necessary to navigate the business challenges Tesla faces.
Meanwhile, resale values for Tesla vehicles have plummeted. According to CarGurus, used Tesla prices have fallen 7.3% year-over-year—more than double the 2.7% decline seen in the broader used car market. The Cybertruck, Tesla’s latest and most polarizing release, has reportedly lost 58% of its value on the resale market.
Adding to the pressure is a growing “Tesla Takedown” movement on social media, encouraging owners to sell their vehicles, dump Tesla stock, and protest at showrooms.
Tech analyst Dan Ives of Wedbush, once one of Tesla’s most vocal supporters, has also sounded the alarm. While maintaining an “outperform” rating on the stock, he warned last week that investor patience is “wearing very thin.”
The Road Ahead
For years, Tesla’s dominance in the electric vehicle market allowed investors to overlook Musk’s unpredictable behavior. But with mounting competition and declining sales, questions are emerging about whether Tesla can maintain its leadership position.
If the company continues to falter while its CEO remains distracted by political battles, the once-unshakable connection between Musk and Tesla may become more of a liability than an asset.
