Tesla Shares See Significant Dip Amid Market Challenges
Tesla’s stock plunged over 8% on Monday, placing the electric car company among early decliners in the S&P 500. The stock fell below its levels prior to the election and has plummeted by half since its peak on December 17. Investor concerns revolve around CEO Elon Musk’s involvement with the Trump administration, potential tariff implications, and dwindling registrations in China and Europe, all contributing to the pressure on the stock.
On Monday morning, Tesla (TSLA) shares dropped by more than 8%, marking a rough start to the week as the electric vehicle giant’s stock has seen a decline for seven consecutive weeks. This recent slump positions Tesla among the most significant fallers in the S&P 500.
The company’s shares have decreased by more than 50% since their record high of $479.86 on December 17, erasing the entire gains made post-election after President Donald Trump’s victory in November. Since Trump’s inauguration and with Elon Musk’s involvement in the Government Efficiency Department, Tesla’s shares have been on a steady decline.
The tumble in stock value is attributed to underwhelming fourth-quarter deliveries and earnings, ongoing uncertainty about Trump’s tariffs, and falling sales in China, as well as registration numbers in Europe at the beginning of the year. There’s a debate among investors and analysts about whether Musk’s role in the Trump administration could adversely affect Tesla’s brand and future sales, as the company’s showrooms have been the target of protests recently.
Analysts remain split over Tesla’s stock, with Visible Alpha tracking 19 brokers whose recommendations are divided: 10 “buy,” five “hold,” and four “sell” ratings. UBS analysts have maintained their “sell” stance, reducing their price target to $225 from a previous $259, and have lowered their forecast for first-quarter deliveries to 367,000 from an earlier estimate of 437,000. While they acknowledge that the new Model Y and an anticipated lower-cost model may boost sales, they note that demand for the Model Y currently appears subdued and anticipate that a cheaper model will have slimmer profit margins.