Demand for Tesla cars is declining, and the company’s stock price is plummeting. Elon Musk’s Tesla stock price crossed $400 in December 2024 and has been in reverse gear since then. The all-time high closing price was 479.86 on December 17, 2024. The $1 trillion company’s stock is down by almost 30% in 2025 so far.
Last week, Tesla’s stock saw a spike when Musk held an all-hands meeting with Tesla employees and told them not to sell any Tesla shares. This pep-talk came after several top executives and board members of Tesla sold large amounts of stock.
“Since February, executive stock sales have exceeded $100 million, suggesting a lack of internal confidence in the company’s future. James Murdoch, a board member, sold $13 million worth of shares on March 10, the same day Tesla suffered its most significant single-day drop in five years.
Kimbal Musk, Elon Musk’s brother and board member, sold 75,000 shares valued at $27 million. Meanwhile, Robyn Denholm, the board chair, made two recent sales totaling over $75 million. Analysts have interpreted these transactions as warning signs about the company’s future performance, as Tesla’s market value has fallen nearly 50% from its peak in December 2024,” says Antonio Di Giacomo, Financial Markets Analyst for LATAM at XS.
Tesla stock slumped over 5% on Wednesday. The long term investors of Tesla are still in high double-digit gains. Over 1-year, 5-year and 10-years, Tesla stock has delivered 67%, 51% and 36% respectively.
Cathie Wood’s Ark Investment Management LLC remains bullish on Tesla Inc. and expects the stock will hit $2,600 in five years, or almost 10 times its current price.
In a Bloomberg TV interview, Wood stated that 90% of Tesla’s value will come from its robo-cabs during that period. Speaking on the sidelines of the HSBC Global Investment Summit in Hong Kong on Tuesday, she noted that Ark hasn’t even taken Tesla’s humanoid robot projects into account when predicting the price.
With a market share of almost 70%, Tesla leads the US market for sales of battery-powered electric vehicles. In the US, the company’s flagship Model 3/Y is the top-selling electric vehicle.
So, what is going wrong with Tesla currently? Elon Musk, the company’s billionaire founder, is facing political backlash, which has caused sales and shipments to plummet in important regions like China and Europe. His Department of Government Efficiency’s decision to eliminate thousands of government positions has also increased domestic unrest. “A major challenge revolves around Tesla’s CEO Musk whose recent political involvement and public stances on government policies and federal spending cuts have sparked widespread controversy,” says Ahmad Assiri Research Strategist at Pepperstone.
Around the world, campaigns and protests have arisen against Tesla, Musk, and his position in the Trump White House. In a series of events in the United States and around Europe, criminal acts of vandalism and arson have also targeted specific Tesla electric automobiles, showrooms, and charging points.
Sales of Tesla’s new cars have decreased recently in China, Europe, and some U.S. states. President Trump’s several executive orders levied new taxes on materials and goods from China, Mexico, and Canada—all of which are home to important Tesla suppliers—creating trade uncertainty for the company.
Another challenge is from BYD, its closest rival in EV space. BYD reported $107 billion in 2024 revenue, surpassing Tesla’s $100 billion mark and gaining $10 billion in annual revenue, following the launch of a charging system offering 250 miles of range. BYD has introduced a charging system that promises to provide 250 miles of range for its latest EV model after just five minutes of charging.
“China’s BYD continues to gain considerable traction in the EV market, recording rapid growth and becoming increasingly attractive to consumers and investors alike. This intensifying competition directly threatens Tesla’s market share, with BYD potentially overtaking Tesla’s position in the industry,” adds Assiri.
In January 2025, Tesla reported the first full-year drop in sales in its history, as increased competition and slowing demand for electric vehicles hit its results.
Conversations in the Reddit group ‘teslainvestorsclub’ is keeping investors informed with topics ranging from Tesla’s sales numbers, how buyers on Germany are reacting to Tesla cars to what Ex-Waymo CEO John Krafcik is saying about Tesla.
“As Tesla faces these challenges, investors are cautiously watching the company’s performance in the coming months. Tesla’s future appears increasingly uncertain with rising competition, brand politicization, and economic uncertainty. Unless the company can reverse the trend with practical strategies, 2025 could become one of the most challenging years in its history,” says Giacomo.
The only silver lining for long term investors is that Tesla’s foray into autonomous driving and robotics make Tesla more than just an EV company. “In cars, Musk expects a new, cheaper vehicle to start production sometime in the first half of this year. This could reignite interest in the vehicle business. Cybercab in 2026. In full-self driving, starting up in Austin in June,” says Nancy Tengler, CIO and CEO of Laffer Tengler Investments. Tesla’s upcoming quarterly earnings will be a crucial metric for determining the stock’s next directional move.