Tesla share price may fall 65%? Why analysts see a bumpy road for Elon Musk's EV maker

Shares of Tesla have delivered a mixed set of performance for the investors. The Elon Musk-owned EV carmaker has gained more than 50 per cent in the last 6 months, while the stock is down 10 per cent on a year-to-date (YTD) basis. However, the stock has off-to a bumpy ride amid the falling market shares and positive future prospects.

According to a Reuters report, Tesla has seen its market share falling to 38 per cent of the total EV sales in the US in August 2025, which once stood more than 80 per cent. It has breached the 40 per cent mark for the first time since October 2017. The fall can be attributed to delayed launch of the new products and cancellation of cheaper EV models.

In essence, the market has recognised the loss in market share for Tesla. Its last new model was the Cybertruck pickup that rolled out in 2023. On the other hand, Tesla has been focusing on building robotaxis and humanoid robots. The relaunched variant of Model Y has also failed to live up to the expectations.

Last year’s excitement around the Cybertruck, a lower-cost model in development, and Musk’s bigger plays in autonomy and AI drove stock prices up by 60% in the last one year. But if we shorten the time frame to year-to-date, the stock is down almost 10% as deliveries have softened and rivals have started to chip away at Tesla’s dominance, said Viram Shah, Founder & CEO at Vested Finance.

“In Q1 2025, Tesla delivered roughly 3.4 lakh vehicles, its weakest quarter in more than two years. Tesla’s US market share fell to 38 per cent in August, its lowest level since 2017. So, the contrast between a strong 12-month rally and a year-to-date decline is mostly about timing,” he added.

The market is paying for Tesla’s longer-term bets in AI, robotics, and energy. Its Full Self Driving program, robotaxi ambitions, and fast-growing energy storage business with 30 percent plus margins are seen as potential high-margin growth engines, said Justin Khoo, Senior Market Analyst of APAC at VT Markets. “Investors factor in Tesla’s strong balance sheet and a pipeline of new products.”

“For investors, the stock remains highly volatile. Upside depends on flawless execution of new models and progress in autonomy, while risks include further margin erosion and Chinese competition. The best positioning is to hold existing shares, trim if overweight, and add only on pullbacks or when new catalysts such as the affordable model launch materialize,” he suggested.

Analysts continue to remain split on Tesla stock price. Some still believe in the long-term story, while others are focusing on the short-term cracks. Among the overseas brokerage firms, Morgan Stanley has a ‘buy’ rating on the stock with a target price of $410 hinting at 18 per cent upside, while Wells Fargo has a ‘sell’ rating with a target price of $120, suggesting a 65 per cent crash.