Tesla's Q1 2025 stock price fell 36%, wiping out $460 billion in market cap
Estimated Q1 deliveries at 373,000 units, down 3.6% YoY
Brand image hit by Musk's political involvement
Intensifying competition with Chinese EV makers
Opinion
Tesla faces multiple headwinds, including reputational damage and weak sales in core markets, making a swift recovery in investor sentiment unlikely.
Core Sell Point
Political risks and declining sales are combining to keep downward pressure on Tesla's stock in the short term.
Tesla's stock has plunged 36% in the first quarter of 2025, wiping out approximately $460 billion in market capitalization. This marks the third-largest quarterly drop in Tesla’s history and the worst performance since Q4 of last year (-54%). The steep decline is attributed to a combination of factors, including CEO Elon Musk's politically charged actions tarnishing the brand image, intensified competition from Chinese EV makers, and uncertainties surrounding President Trump's tariff policies.
The outlook for Tesla's Q1 vehicle deliveries is equally concerning. Wall Street analysts estimate deliveries at approximately 373,000 units, down 3.6% year-over-year (from 386,810 units in Q1 2024). Some bearish estimates suggest deliveries could fall further to as low as 340,000–350,000 units. Weak sales across key markets — the U.S., China, and Europe — coupled with deferred demand for the Model Y upgrade and slowing sales of high-end models have contributed to the bleak projections.
While Musk has publicly acknowledged the damage to Tesla's brand image caused by his political activities, he remains optimistic, calling the current share price "a buying opportunity." However, market participants remain skeptical about the feasibility of Tesla's promised robotaxi service, expected to launch in June.
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