4 reasons why Tesla's 53% stock crash is accelerating today
- Tesla stock is barreling towards an eighth straight weekly drop, falling another 7% on Tuesday.
- Shares have now plummeted 53% from record highs reached in mid-December.
- There were two new reasons for continued Tesla selling, and two evergreen issues weighing on shares.
Tesla investors are having another rocky day, with shares down as much as 7%.
The stock is heading for an eighth straight weekly loss, and now sits 53% below all-time highs reached in mid-December.
As each day passes, the list of headwinds facing the EV maker seems to grow. In addition to existing pressures, Tuesday saw Tesla investors face fresh competition from China and an analyst price-target cut.
Detailed below are the four forces — two new, two evergreen — driving the acceleration in Tesla’s share-price decline.
1. BYD’s new battery tech
Chinese firm BYD unveiled an EV-charging station that it claims can deliver up to 400 kilometers of driving after just five minutes of charging. This would be a big step up from current charging technology, with Tesla’s quickest version providing a 275-kilometer range after 15 minutes of charging.
The development creates another headwind for Tesla as it tries to break into Chinese market.
BYD plans to build 4,000 of these chargers across China.
2. Wall Street scaling back forecasts
Though RBC maintains an “outperform” rating on Tesla, it cut its price target to $320 from $440.
Analyst Tom Narayan expects lower pricing on Tesla’s full-self-driving technology as autonomous offerings become increasingly standard across the EV industry. Meanwhile, given heightened competition in Europe and China, Narayan lowered robotaxi-penetration assumptions.
“As a result, we now lower our market share assumption to 10% from 20% in both markets,” he wrote.
RBC’s adjusted forecast adds to a growing string of downgrades plaguing Tesla. Last week, JPMorgan lowered its price target by about 41% to $135 per share, citing lower guidance on vehicle deliveries.
3. Slowing vehicle sales worldwide
Sales data this year is bolstering market gloom, with consumers sidestepping Tesla in favor of other EV competitors.
China shipments of Tesla vehicles fell 49% year-over-year in February. The company sold 30,688 Chinese-made vehicles, its lowest sale since August 2022.
A similar trend is showing up in Europe. January Tesla purchases in the region fell 45% from a year ago, compared to a 37% jump in overall European EV sales. The pattern continued into February, with sales in Germany falling by 76%.
4. A distracted CEO
Irritation is also growing with Tesla’s leadership, as investors question the priorities of CEO Elon Musk.
Musk — whose firebrand image as a tech innovator helped propel the stock to past records — seems increasingly distant from the company, minting cynics out of Tesla’s old-time bulls.
In large part, investors have blamed his growing role in the Trump administration, with Musk heading the efforts of the Department of Government Efficiency. He himself has noted “great difficulty” in dividing his attention between DOGE and his many companies, a statement investors were likely unhappy to hear.
“We think shareholders have legitimate concerns about Elon Musk being spread too thin, and it’s become clear he’s now spending more time on DOGE than anything else,” CFRA senior equity analyst Garrett Nelson previously told BI.