Tesla stock has had more than its fair share of pops and drops.
The company’s CEO, Elon Musk, has won equal praise and criticism for his efforts and mercurial nature, and as a result, Tesla’s stock price has taken a roller coaster ride over the past decade.
Elon Musk’s fans celebrate his seemingly single-handedly hoisting the electric vehicle market on his back and thrusting EVs into the mainstream. His detractors complain of broken promises, including launch timelines for new models and ever-elusive autonomous vehicles.
Lately, the debate has become more tense following his decision to spend hundreds of millions supporting President Trump’s election bid and his new role as head of the Department of Government Efficiency, or DOGE, an organization in the executive branch tasked with cutting costs.
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Musk’s political role has raised questions among once-loyal supporters worldwide who historically leaned toward the left. This has resulted in sagging Tesla sales in key markets in Europe, China, and states like California.
As a result, Tesla shares have endured a reckoning. After rising over 60% in 2024, they’ve tumbled by 45% from December’s peak, including a 35% drop in 2025.
The sell-off has led many investors to wonder if Tesla’s stock is likely to continue sliding.
Elon Musk’s Tesla has struggled so far in 2025.
Tesla is at a crossroads
Tesla’s (TSLA) success stems from refocusing the electric vehicle market on performance. Rather than developing and marketing vehicles that were solely environmentally friendly, Musk focused on building high-performance luxury cars that could rival Mercedes Benz and Porsche.
The strategy paid off, turning Teslas into aspirational cars sought after by celebrities and enthusiasts. This surprised competitors like Ford and General Motors, leaving them flat-footed and without competing products to sell to buyers.
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However, that’s not true anymore.
Detroit’s big three car companies- and almost every other car company on the planet- have invested billions building their own EVs, many of which offer similar performance and arguably better fit-and-finish.
As a result, Tesla’s market share in the electric vehicle market is shrinking even as demand takes a hit because of Musk’s polarizing political moves.
In China, China Passenger Car Association data showed Tesla’s February wholesale sales, including exports and retail sales, fell 49% year-over-year. Overall, Tesla sold 30,688 new energy vehicles (NEVs) there last month, the smallest number in over two years. For perspective, Chinese EV maker BYD sold 318,233 vehicles.
The situation is similar in Europe. Tesla’s sales in Europe slumped 45% in January while the overall industry sales rose 37%. In February, the German Federal Motor Transport Authority said sales collapsed 76% to 1,429 cars, despite a 31% increase in electric vehicle registrations.
In the U.S., Tesla sales slipped 1% in 2024, the company’s first annual sales drop in over a decade. According to the Cox/KBB quarterly EV sales report, Tesla units sold only increased by 2.3% in the fourth quarter, while total EV units sold rose by 15%. Ford sales rose 16% for perspective, while General Motors brands Cadillac, GMC, and Chevrolet all notched growth over 100%.
Tesla stock flashes rare signal
Given that backdrop, it’s easier to understand why Tesla shareholders have grown antsy and why their shares have slumped.
While Tesla’s stock price may continue sliding, some signs are starting to suggest that the selling may be getting overdone. If so, Tesla’s stock could soon experience a relief rally.
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One of the signals that may be flashing buy is the relative strength index, or RSI. RSI (14) measures price action over the preceding 14 trading periods and can signal when stocks become overbought and oversold.
When the RSI is above 80, it signals buyer beware. However, when it dips below 30, it can suggest that shares may be about to move higher.
Tesla’s RSI eclipsed 80 in mid-December when shares were near $480. On March 7, when the price was about $263, it was 27, a third consecutive day below 30.
“The RSI is oversold for the first time in almost a year,” wrote long-time technical analyst Jason Meshnick in a post on TheStreet Pro. “There’s support here, from both the uptrend line and from the peaks from last July, September and October.”
If Tesla shares find their footing, how high could they go?
“Trend and momentum support a bounce,” said Meshnick. “A trading bounce to $300 or even $325 seems reasonable.”
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Of course, nothing is guaranteed. Stocks can get and stay oversold for a while. And the market is fickle, with some big macro concerns weighing it down, including inflation, a wobbly jobs market, and tariffs.
“The caution is that TSLA sometimes falls further before bouncing. And, of course, oversold never means buy. Stocks can remain oversold longer than you or I (or even Musk) can remain solvent,” said Meshnick.
At what point would Meshnick say no mas and sell?
“More than a dip below about $250, and I’d sell as fast as a Model S Plaid,” concluded Meshnick.
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