Tesla (TSLA) Stock: Tesla Shares Plummet 15% in Worst Trading Day Since 2020 as Demand Concerns Grow
TLDR
Tesla stock fell over 15% on Monday, wiping out all post-election gains
UBS lowered its price target to $225 from $259, cutting Q1 delivery forecasts to 367,000 vehicles
Tesla’s China shipments dropped 49% in February to the lowest level in almost three years
Some analysts remain bullish, with Wedbush adding Tesla to its “Best Ideas List” despite the slump
CEO Elon Musk’s political involvement may be impacting sales, with protests occurring at showrooms
Tesla stock experienced its worst trading day since September 2020 on Monday, plunging more than 15% as concerns about vehicle demand continue to mount. The steep decline has erased all of the electric vehicle maker’s post-election gains from November.
The sell-off accelerated after UBS analysts lowered their price target on Tesla shares to $225 from $259. They maintained their Sell rating on the stock.
UBS cited softer demand for Tesla’s Model 3 and Model Y vehicles as the primary reason for their downgrade. The firm now expects Tesla to deliver 367,000 cars in the first quarter.
This represents a 5% drop from last year and a 26% decline from the previous quarter. UBS pointed to “low delivery times” in key markets as evidence of weakening demand.
Adding to investor concerns, Tesla’s shipments in China fell 49% from last year in February. This brought deliveries to their lowest level in almost three years.
With Monday’s drop, Tesla stock has now given up all of its gains since the presidential election. The decline is part of a broader unwinding of the “Trump trade” that has characterized recent market movements.
Tesla shares have fallen approximately 18% since the beginning of March alone. The stock is now down 45% for the year.
Despite the steep sell-off, some of Tesla’s biggest supporters on Wall Street remain optimistic. Wedbush analyst Dan Ives has defended the company, calling the current slump a “gut check moment for Tesla bulls.”
Ives added Tesla to Wedbush’s “Best Ideas List” and maintained his Outperform rating. He set a price target of $550, suggesting significant upside potential from current levels.
Morgan Stanley analyst Adam Jonas also reiterated his bullish view. He forecasts shares will rise to $430 as the company expands into artificial intelligence and robotics.
Jonas reinstated Tesla as a top pick for the auto sector. He described Tesla’s softer auto deliveries as “emblematic of a company in transition” from a pure automotive play to a diversified AI and robotics business.
Some market observers have suggested that CEO Elon Musk’s increasing political involvement may be affecting Tesla sales. Musk became one of Donald Trump’s key campaign surrogates during the 2024 election.
Registration data shows Tesla car sales falling in Europe. Meanwhile, the firing of government workers by the Musk-led Department of Government Efficiency (DOGE) has prompted protests at Tesla showrooms across the United States.
A Quinnipiac poll from late January found that voters oppose Musk playing a prominent role in the Trump administration by a 53% to 39% margin. This negative sentiment could be impacting consumer purchasing decisions.
In Germany, Tesla registrations plummeted 70% during the first two months of the year. This coincided with Musk weighing in on the country’s federal election.
The situation in China is equally challenging for Tesla. The company is struggling to keep pace with domestic rival BYD Co. Vehicle shipments from Tesla’s Shanghai plant dropped to just 30,688 vehicles in February.
After Monday’s trading, Tesla shares closed at $222.15, down $40.52 or 15.43%. The stock sits more than 50% below its record closing high of $479 reached on December 17, 2024.
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Filed under: News - @ March 10, 2025 9:29 pm