Tesla’s stock dropped 5.34% on Tuesday, falling to $225.31, as concerns about increasing competition from China’s BYD, declining sales in Germany and France, and growing skepticism among Wall Street analysts weighed on investor sentiment. The stock has now lost nearly 50% of its value since December, extending its steep decline in 2025.
BYD unveils ultra-fast charger, intensifying EV race
Chinese automaker BYD introduced a five-minute fast charger, a significant technological leap in the EV industry. The company announced it would launch vehicles with this charging capability as soon as next month, positioning itself as a leader in battery efficiency. BYD shares soared to a record high in Hong Kong in response.
Tesla, meanwhile, has yet to receive Chinese approval for its Full Self-Driving (FSD) technology, putting it at a disadvantage as BYD reportedly moves to integrate DeepSeek AI’s self-driving capabilities.
Sales plummet in key European markets
Tesla’s struggles are not limited to China. Sales in Germany, the largest EV market in Europe, plunged 76% in February to just 1,429 units, even as overall EV sales in the country surged 31%. French sales dropped 44% over the same period.
The decline follows CEO Elon Musk’s endorsement of Germany’s far-right AfD party in the 23 February elections, a move that has been met with political and consumer backlash. Germany’s likely next chancellor, Friedrich Merz, has ruled out working with AfD, further isolating Musk’s stance.
Compounding Tesla’s challenges in Europe, production disruptions at its Berlin Gigafactory have slowed Model Y deliveries due to assembly line upgrades. Activist attacks on infrastructure have also contributed to operational delays.
Wall Street slashes Tesla forecasts
Investment firms Oppenheimer and RBC Capital have adjusted their outlooks on Tesla:
- Oppenheimer cut its 2025 revenue projection by 2% to $97.9 billion, citing weaker-than-expected deliveries and increased competition.
- RBC Capital revised its Tesla price target to $320, warning that self-driving and robotaxi adoption in China and Europe could be delayed further.
- The consensus analyst target for Tesla is $359, significantly higher than its current trading price.
Executive stock sales raise investor concerns
Tesla insiders have offloaded over $100 million in stock since February, fueling concerns about confidence in the company’s trajectory. Notable sales include:
- Board Chair Robyn Denholm sold $75 million in shares.
- Kimbal Musk, Elon Musk’s brother and board member, sold $27 million worth of stock.
- James Murdoch, a longtime Musk ally, exercised options and sold $13 million in shares.
While some sales were part of pre-planned transactions, others came amid Tesla’s sharp stock decline.
Musk’s political involvement and shifting priorities
Musk’s role in the Trump administration’s Department of Government Efficiency (DoGE) has drawn criticism, with investors questioning whether Tesla’s CEO is spread too thin. The Biden administration’s tariffs on Chinese EVs had initially benefited Tesla, but Trump’s tariff rollback discussions have introduced uncertainty.
Tesla’s stock has underperformed since Trump’s inauguration in January, with hedge funds shorting the company’s stock to the tune of $16 billion, according to data from S3 Partners.
What’s next for Tesla?
- Tesla is reportedly planning to launch a cheaper Model Y in China next year, hoping to regain market share.
- Musk has announced plans to double US vehicle production within two years, aligning with Trump’s push for American manufacturing.
- The company is preparing for a robotaxi unveiling, but regulatory roadblocks in China and Europe remain a challenge.
Despite Musk’s claims that Tesla’s profits could grow 1,000% over the next five years, investors remain skeptical.
