On Monday, March 10, 2025, Tesla's stock (NASDAQ: TSLA) experienced one of its most significant declines, falling more than 15% to close at around $222.05, its lowest price since late 2024. The drop marked the worst performance for Tesla since September 2020 and resulted in the company losing all gains made following the 2024 presidential elections. This decline has left Tesla shares worth approximately half of their peak value of $479.86 reached on December 17, 2024, following CEO Elon Musk's association with the Trump administration.
The news worsened Tesla's reputation, particularly as concerns continued to mount about CEO Elon Musk's involvement with President Donald Trump's policy decisions and the potential impact of tariffs on the electric vehicle maker's bottom line. Trump's administration’s tariffs on steel and aluminum, set to be reinstated next month, could substantially diminish Tesla's gross margin, contributing to investor anxiety.
The company's stock decline also coincided with broader market downturns; the S&P 500 dropped 2.7% on the same day, with the NASDAQ showing even more substantial losses of 4%. These market movements are indicative of growing apprehension about the state of the U.S. economy and fears of impending recession. President Trump, during a recent television interview, acknowledged the possibility of his policies negatively affecting GDP growth short-term, even as he argued they would bring long-term benefits.
According to UBS, Tesla's poor sales are exacerbated by disappointing vehicle delivery projections. Their recent analysis projected Tesla would deliver only 367,000 vehicles globally for the first quarter of 2025, falling short of the consensus expectation of 415,000 — marking an 11.5% reduction. This figure is even more concerning, considering Tesla had reported higher delivery figures of 462,890 and 495,570 vehicles for the third and fourth quarters of 2024, respectively. The expected decline of more than 26% from the previous quarter signals potential trouble for the company moving forward.
Sales across Europe and China have also faltered, contributing to investor concerns about Tesla's market share and brand reputation. For example, Tesla's sales plummeted by 76% year-over-year in Germany, with only 1,429 units sold during February 2025. Analysts fear Musk’s endorsements of far-right political parties may have hurt Tesla's brand perception, particularly with growing backlash against the company. Such sentiments have resulted in boycotts of the brand, as competitors gain traction within the market.
While some analysts maintain relatively optimistic future projections due to new product launches, overall sentiment remains mixed. UBS has maintained its “sell” rating and revised its price target for Tesla down to $225 from $259, highlighting concerns about muted demand for new models and lower-profit margins for any lower-cost vehicles brought to market. The new Model Y, which is expected to boost sales, faces skepticism from several market observers.
Meanwhile, the financial fallout extends beyond the company itself, affecting Elon Musk's personal wealth significantly. Reports indicate Musk experienced one of the largest declines in net worth, with his fortune dropping by $139.4 billion from its peak of $464 billion in December 2024 to $324.6 billion. On March 10 alone, Musk lost $18 billion, making headlines as Google searches surged around how much money he and Tesla lost due to the stock's performances.
Despite these losses, Musk remains the richest individual globally, holding about $115 billion more than his closest competitor. Nevertheless, the ensuing volatility surrounding Tesla's stock may continue to impact Musk’s fortune and the company’s overall standing within the automotive industry.
Questions continue to loom over Tesla’s prospects as it navigates rising competition, regulatory challenges, and the effects of broader economic policies. Investors remain on alert for future market developments, particularly as Tesla aims to rebound from its dismal performance and investors contemplate the real long-term impacts of the current political climate on business.