Table of Contents
Introduction
Tesla recently faced one of its most challenging trading days in years, when its stock fell by 15% on Monday. This sharp decline has increased investor concern about the company’s future. However, CEO Elon Musk remains resolute and assures stakeholders that Tesla’s long-term trajectory remains intact.
Tesla’s stock suffers biggest drop since 2020
On Monday, Tesla’s stock suffered its worst single-day drop in four years. The company’s market value is now down 45% since the start of 2025, wiping out the gains it made after Donald Trump’s victory in the US presidential election.
Wall Street analysts raise concerns
Declining demand for Tesla EVs
Market analysts are expressing growing concern over declining demand for Tesla. With increasing competition and market saturation, Tesla’s path to expansion is becoming more uncertain.
UBS analyst revises forecasts
Joseph Spak, a lead analyst at UBS Group AG, has significantly lowered his delivery estimates for Tesla. His latest forecast estimates deliveries of just 367,000 vehicles in the first quarter of 2025 – down 16% from his previous forecast. Spak has also adjusted his annual growth expectations, now forecasting a 5% decline in Tesla sales, as opposed to his earlier forecast of renewed growth for the company.
Additional downgrades from market experts
Ben Calo, an analyst at Robert W. Baird & Co., has also revised his Tesla estimates, citing supply chain disruptions and weak demand. In addition, Tesla’s official website in China now shows a reduced delivery wait time of two to four weeks – often a sign that customer interest is waning.
Tesla struggles in key markets
Challenges in Germany and China
Tesla’s market position looks weak in some of its most important regions, particularly Germany and China, where demand has fallen sharply.
Sales fall in Germany
In Germany, Tesla’s vehicle registrations fell by 70% in the first two months of 2025. Part of this decline is linked to growing political opposition against Musk’s participation in the country’s federal elections, which has affected Tesla’s reputation in Europe.
Tough competition in China
Tesla also faces tough competition from local electric vehicle manufacturers in China, particularly BYD. The company’s Shanghai factory reported a 49% drop in vehicle shipments in February, its weakest monthly performance since July 2022.
Tesla’s long-term outlook
Despite these market challenges, Musk remains confident about Tesla’s future. They believe that short-term stock volatility does not define the company’s long-term success and they continue to focus on innovation and expansion strategies.
Conclusion
The decline in Tesla’s stock has undoubtedly raised concerns among investors and analysts. The company is grappling with a number of challenges, including declining demand, intense competition, and political controversies. However, Musk’s confidence shows that Tesla is committed to long-term growth. The next few months will be crucial in determining whether the company can regain investor confidence and stabilize its position in the EV market.
