Tesla Stock Plunges Over 15% Amid EV Demand Concerns and Wall Street Warnings
Tesla Inc. (NASDAQ: TSLA) has faced a significant setback, with Tesla stock tumbling over 15% on Monday. This sharp decline has erased all the post-election gains and brought Tesla’s share price to its lowest point since before the 2024 presidential election. The electric vehicle (EV) giant’s Tesla stock is now down more than 50% from its record high of $479 reached on December 17.
This downturn highlights growing concerns about Tesla’s vehicle demand, particularly for its popular Model 3 and Model Y.
Wall Street’s Bearish Stance Hits Tesla Stock Hard
On Monday, analysts at UBS slashed their price target for Tesla stock to $225 from $259, citing weaker delivery forecasts for the first quarter. UBS maintained a Sell rating on the Tesla stock, further pressuring investor sentiment.
UBS analysts now predict that Tesla will deliver 367,000 vehicles in Q1 — a steep drop from their previous forecast of 437,000. This adjustment reflects a projected 5% year-over-year decline and a 26% drop compared to Tesla’s fourth-quarter results in late January.
The UBS report also highlighted a troubling indicator — short delivery times (often under two weeks) for Tesla’s key models in major markets. Analysts believe this signals softer demand as consumers appear less eager to purchase Tesla vehicles.
China’s Declining Sales Amplify Pressure
Adding to Tesla stock’s woes, data from February revealed that Tesla’s China shipments plummeted by 49% year-over-year — the lowest figure recorded in nearly three years. Given that China is Tesla’s second-largest market, this drastic sales decline has heightened concerns about the company’s global demand trajectory.
Post-Election Gains Wiped Out
Monday’s sharp sell-off effectively erased all the gains Tesla stock had achieved following the 2024 presidential election. This slump aligns with what analysts describe as the unwinding of the “Trump trade,” a series of market moves driven by election results and political expectations.
Tesla stock shares have now fallen more than 20% since the start of March alone, marking a challenging period for the EV giant.
Tesla Bulls Defend the Company
Despite the turbulence, some prominent Tesla stock supporters remain optimistic. Last Thursday, Wedbush analyst Dan Ives reiterated his bullish stance, describing the recent plunge as a “gut check moment for Tesla bulls (including ourselves).”
Ives added Tesla to Wedbush’s “Best Ideas List” and maintained his $550 price target with an Outperform rating. He also emphasized that Tesla has endured similar pullbacks before, stating:
“There have been a number of times in the Tesla story over the past decade where negative sentiment and Street worries have overshadowed the narrative of this unique disruptive global tech story.”
Tesla’s Future in AI and Robotics: A Silver Lining?
Morgan Stanley analyst Adam Jonas also reinforced his positive outlook on Tesla stock. Jonas predicts Tesla’s stock could rise to $430 as the company expands into artificial intelligence and robotics.
Jonas described Tesla’s recent delivery struggles as indicative of the company’s strategic shift:
“Tesla’s softer auto deliveries are emblematic of a company in the transition from an automotive ‘pure play’ to a highly diversified play on AI and robotics.”
He suggested that declining deliveries in 2025 could provide investors with an attractive entry point to capitalize on Tesla’s evolving business model.
The Musk Effect and Political Controversy
While competition in the EV market continues to tighten, Tesla’s recent struggles are also tied to CEO Elon Musk’s controversial political involvement. Musk’s active support for Donald Trump’s 2024 presidential campaign has drawn criticism, particularly after Musk’s involvement in the firing of government employees as part of his role with the Department of Government Efficiency (DOGE).
Public backlash has intensified, with protests erupting at Tesla showrooms across the U.S. A Quinnipiac University poll from January revealed that 53% of voters disapprove of Musk’s political actions, compared to 39% who support his involvement.
What’s Next for Tesla?
Tesla is scheduled to report its Q1 earnings on April 22, which will offer investors critical insights into the company’s financial health and future prospects. Analysts will be closely watching Tesla’s delivery numbers, guidance updates, and commentary on demand trends.
With concerns about weaker vehicle sales, political controversies, and shifting business priorities, Tesla’s performance in the coming months could significantly shape investor sentiment.
