Tesla Inc. (TSLA) is facing tremendous challenges as its stock hit another low, declining nearly 5% to approximately $238 per share on March 17, 2025. This marks the latest chapter in what has become an alarming trend for the electric vehicle (EV) giant, which has seen its stock tumble for eight consecutive weeks, shedding nearly 50% of its value since the beginning of the year. This downturn reflects not just market conditions, but also broader geopolitical and leadership issues impacting company performance.
The company’s struggles are exacerbated by its effort to roll out Full-Self Driving (FSD) technology, particularly in pivotal markets like China. Tesla recently announced it would offer free trials of its FSD software from March 17 to April 16, 2025; this deal is available to any owner with the latest hardware configurations. Nevertheless, reports reveal substantial hurdles remain. CEO Elon Musk, during Tesla’s Q1 earnings call, shared, “We do have some challenges because ... they currently don’t allow us to transfer training video outside of China. And then the US government won’t let us do training in China.” These regulatory constraints pose unique challenges for Tesla’s data collection processes, which are hampered by local privacy laws preventing direct data transmission to American servers.
Musk’s increasing involvement and visibility within U.S. politics have also created distractions, leading to protests at Tesla showrooms domestically as public perception shifts. According to Reuters, “Musk's standing has slid among Americans as protests have gained steam at Tesla showrooms.” His ties to contentious political figures and policies have driven some consumers to raise questions about the company's integrity and future, which analysts like Vijay Rakesh from Mizuho suggest has directly affected sales performance.
The data suggests Tesla's sales within the U.S., China, and Europe are suffering. Mizuho's latest forecasts reveal U.S. sales dipped 2% year-over-year, contrasting sharply with the overall 16% growth of the EV market. Sales from China plummeted by 49%, even as the local market grew by 85%. This decline is particularly troubling for Tesla, which has long relied on China as one of its primary growth engines.
Declining market share is evident from increased competition, especially from domestic brands within China, which have been steadily increasing their offerings and technological capabilities. Rivals like BYD and Xpeng are raising the stakes with advanced features, putting pressure on Tesla to deliver significant innovations rapidly.
Despite these challenges, analysts remain conflicted about Tesla's long-term outlook. Mizuho analysts have also lowered their price target for Tesla shares from $515 to $430, yet maintain it as a buying opportunity, implying potential upside of over 80% based on their projections. Rakesh notes, “We believe Tesla's sales woes are the result of … brand perception (U.S./EU), share loss due to stronger competition (China), and softer-than-expected demand for the Model Y refresh.” This acknowledgment highlights both the struggles and the resilience potential within Tesla's product lines.
Tesla is simultaneously banking on future launches to reinvigorate its brand and regain market confidence. Among these, the anticipated rollout of the Cybercab later this year is highlighted as one of the significant initiatives expected to positively influence investor sentiment and customer perception. Analysts believe Tesla remains poised to lead innovation within self-driving technology, provided it can overcome the current impediments affecting deliveries and public belief.
Looking to the broader financial outlook, global tariffs and trade policies under the Trump administration have added another layer of uncertainty for Tesla. With impending regulations, analysts warn “retaliatory tariffs on U.S. goods could weigh heavily on its business.” Tesla’s recent letter to the Office of the U.S. Trade Representative urged consideration of how tariffs would affect manufacturing and sourcing, highlighting the intricacies of global trade and their influence on domestic companies.
The current environment for Tesla presents both caution and opportunity. At present, about 53% of respondents to recent polling hold negative views of Musk, which paints a concerning portrait for the CEO as he navigates complex market dynamics. Despite the bearish sentiments shadowing Tesla, Rakesh emphasizes the company's fundamental strengths should not be overlooked, stating it continues to be revered as a leader within the EV and autonomous vehicle sectors.
With volatility across the board, investors are left grappling with whether to cling to their shares through this tumultuous period or take the chance to buy on dips. Is Tesla's reputation sustainable, or will political involvement and market pressures continue to erode its standing? Only time will tell, but the company must pivot effectively to adapt and thrive amid these pressures and restore confidence as it once enjoyed.
