Tesla’s stock has experienced a significant decline, dropping approximately 48% since mid-December 2024.  As of March 13, 2025, the stock closed at $240.68, reflecting a 3% decrease from the previous day. 

Several factors have contributed to this downturn. Tesla’s first-quarter delivery estimates have been revised downward to around 360,000 vehicles, a notable decrease from Wall Street’s expectation of 430,000. This shortfall is partly due to the transition to an updated Model Y, especially in China, where February sales dropped significantly.  Additionally, heightened competition from Chinese electric vehicle manufacturers like BYD has intensified, leading to a 49% year-over-year decline in Tesla’s February sales in China. 

Elon Musk’s recent political engagements have also played a role in the stock’s decline. His involvement with President Donald Trump’s administration and his political activities have led to consumer protests and boycotts, negatively impacting Tesla’s brand perception.  The “Tesla Takedown” movement, which encourages divestment from Tesla products and stock, has gained momentum, further pressuring the company’s market position. 

In response to these challenges, Musk’s attempts to bolster investor confidence, including optimistic profit projections, have not yielded the desired effect, with the stock continuing its downward trend. 

Tesla’s recent struggles have broader implications for the automotive industry. The company’s challenges highlight the increasing competitiveness of the electric vehicle market, particularly from Chinese manufacturers. This shift underscores the need for established automakers to innovate and adapt to maintain their market positions.