Tesla’s Stock Plunge: A 29% Drop – What’s Behind It?

Over the past month, Tesla’s (TSLA) stock has plummeted by approximately 29.41%, reaching a price of $249.98. This marks one of the most challenging periods for the electric vehicle (EV) manufacturer, with a series of negative news reports and macroeconomic factors affecting the EV market. What are the main reasons behind this significant decline?

1. Declining Sales Worldwide

Tesla has experienced a sharp drop in sales in key markets such as Europe and China. In January, Tesla’s European sales plunged by 45% compared to the same period last year, while the overall EV market grew by 37%. In countries like Germany and France, the decline was even more pronounced. Meanwhile, Tesla’s sales in China dropped by 49% in February compared to the previous year, highlighting the increasing competition in the region.

2. Intensified Competition from China

Chinese automakers, such as BYD and others, are rapidly expanding their market share by offering advanced EVs at more competitive prices. This has put significant pressure on Tesla, which was once the dominant player in the EV industry. Companies like BYD have introduced innovative models with cutting-edge technology and have even outsold Tesla in certain quarters.

3. Elon Musk’s Political Involvement

Tesla’s CEO, Elon Musk, is known for his controversial statements and influence on financial markets. Recently, his increasing political involvement, including support for Donald Trump and conservative policies, has sparked criticism from both investors and consumers. Surveys suggest that potential buyers are now hesitant to purchase Tesla vehicles due to Musk’s political stance, which has negatively impacted the company’s brand and sales.

4. Disappointing Analyst Forecasts

Updated reports and forecasts from analysts have further dampened expectations for Tesla. UBS, for instance, has revised its 2025 sales forecast downward, now expecting only 1.7 million vehicle deliveries—a 5% decline compared to 2024. Additionally, Tesla’s stock price target was reduced from $259 to $225, raising concerns among investors.

What’s Next for Tesla?

Tesla faces significant challenges in an evolving EV market. The company will need to introduce technological innovations and adjust its pricing strategies to remain competitive. Additionally, Musk may need to strike a balance between his personal involvement in political matters and Tesla’s corporate interests to prevent further damage to the company’s reputation.

Investors are closely monitoring upcoming developments, but for now, Tesla appears to be heading into a particularly challenging period that could shape its future in the years to come.