From showrooms going up in flames to spray-painted profanities and a growing disdain for Elon Musk, Tesla is suffering a shock to its system.
Since mid-December 2024, Tesla stock has been riddled with turbulence, dramatically plunging by over 50%.
Tesla traded near an all-time high of around $480 per share before the New Year but plummeted to $220 by early March. On March 10, TSLA declined 15% in one day, marking its worst one-day drop since 2020.
$800 billion in market value became road kill and became the steepest drop Tesla has seen in years.
In addition, Elon Musk’s net worth dropped by $100 billion during the spinout. Tesla’s slippery situation has made it “the worst-performing major tech stock of the period” (Forbes).
Investors have understandably experienced some whiplash and are wondering when it’s time to hit the brakes.
Preferences, Politics & Problems
No, it’s not all political but it is a significant factor.
Elon Musk’s problematic behaviour in the White House and focus on firing federal workers — not to mention his arrogant and childish dismissal of hard facts that deeply affect people’s lives — has triggered the Tesla Takedown movement.
Outside of that, competition among EV manufacturers is cutthroat. Many Chinese EV companies offer similar products with incredible capabilities at a lesser cost.
BYD has accelerated past Tesla in tech and sales. In 2024, it made $107 billion in revenue, surpassing Tesla’s $97.7 billion. BYD also sold 4.27 million EVs compared to Tesla’s 1.79 million.
Style vs Safety
Other options also look especially appealing when safety is a priority. Musk is notorious for promising competitive features and advancements that run out to be smoke and mirrors — or rather glass, like the “bulletproof” window mishap.
Safety regulators recalled over 46,000 2024-2025 Cybertruck models to address a defect that could pose road hazards. This was the eighth Cybertruck recall in just over a year, raising eyesbrows and concern.
Missing money
Recently, the Financial Times reported on a $1.4 billion discrepancy in Tesla’s capital expenditure and asset valuation for the latter half of 2024:
”Compare Tesla’s capital expenditure in the last six months of 2024 to its valuation of the assets that money was spent on, and $1.4B appears to have gone astray”.
On top of that, the company accumulated $6B in new debt last year.
While there could be a completely logical explanation for this, the fact such a large amount of money was unaccounted for left a bad impression on investors.
It raised concerns around potentially weak internal controls and aggressive accounting practices.
Tesla’s declining sales and an oversupply in the used Tesla market is can also signal fading customer interest, which can further damage market confidence and brand loyalty.
Will Tesla crash and burn?
In a literal sense, more Tesla’s will likely be set aflame as growing anti-DOGE sentiments boil.
In a figurative sense, Tesla hasn’t hit a red light forever. As of March 24th, Tesla jumped by 10%, marking its best day in 2025 — yet it’s still down more than 30% year-to-date.
The news aligned with The Wall Street Journal’s report on changes to Trump’s reciprocal tariffs starting on April 2nd, boosting market sentiment.
Now, the tariffs may be more nuanced than previously communicated by the Trump administration.
Some countries may be excluded from the burden of the tariffs and new, separate sector-specific tariffs on automobiles, pharmaceuticals and semiconductors may not go through.
Both the Journal and Bloomberg reports noted that this is not set-in-stone and plans are susceptible to change as we’ve already experienced.
Musk also went into CEO mode last week and held an all-hands meeting with Tesla employees. He drove home the value of hanging onto their stock and claimed Tesla’s signature Model Y will become “best-selling car on Earth again this year.”
Friends in high places
At the same time, Musk has the support of fellow White House officials to advertise his vehicles, which could be interpreted as either desperate or opportunistic.
In the US, Presidents are generally exempt from government ethics rules, most federal employees are not and are held accountable for their violations.
A 1989 law prohibites federal employees from using “public office for private gain,” later detailed to include a ban on ”endorsements.”
Another US official promoted Tesla only one week after Trump “turned the White House lawn into a Tesla showroom.
In an interview with reporters at the White House, US Commerce Secretary Howard Lutnick told viewers to buy Tesla stock because it’s “never been this cheap”.
“They’re not even thinking of ethics,” said Trump critic and former Republican White House ethics czar Richard Painter of administration officials (AP News).
A flicker of hope
Despite Tesla’s tail spin, many investors and influencers agree with Lutnick and see now as the time to go all in.
Instead of lowering prices, Musk wants Tesla to lead in innovation by advancing autonomous driving and robotics.
Last October, Tesla revealed the Cybercab robotaxi — a self-driving vehicle designed to carry passengers and make commercial deliveries 24/7, showing lucrative promise. The autonomous driving vehicles run on Tesla’s full self-driving (FSD) software.
Cathie Wood’s ARK Investment Management thinks FSD and the Cybercab could shoot Tesla to an $8 trillion valuation by 2029 courtesy of sizable opportunity in new industries like autonomous ride-hailing.
At the same time, Musk’s inability to deliver on his promises and release realistic technology in a safe, reliable capacity has many investors skeptical.
The uncertainty and mounting concern around US politics, trade wars and tariffs, Musk’s highly public and controversial personal life and overseas competition all intersect and will determine Tesla’s path.
What do you think? Will Tesla be totalled or will its tires pump back up?
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