Tesla (TSLA) shares lost 3% on Mar. 4 following Monday’s drop. Amid weak sales, tariff worries, and CEO Elon Musk’s intensifying political role, the stock has lost a third of its market value since President Donald Trump took office.
Data from the China Passenger Car Association showed that Tesla’s February wholesale number, which includes exports and retail sales, dropped 49% year-over-year.
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In February, Tesla sold 30,688 new energy vehicles (NEVs) in China, its lowest monthly total in over two years. In contrast, Chinese EV maker BYD led the market with 318,233 sales.
In January, Tesla’s sales in Europe plummeted 45%, while the overall industry sales in the region surged 37%, according to Bloomberg.
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The company’s fourth-quarter earnings and revenue, reported in late January, both missed analysts’ estimates. Its automotive revenue fell 8% to $19.8 billion year over year, while operating income declined 23% to $1.6 billion.
Tesla attributed the decline largely to lower average selling prices across its Model 3, Model Y, Model S, and Model X lines.
Musk’s increasing political engagement may be impacting the decisions of many of Tesla’s core customers, who are historically left-leaning, environmentally conscious buyers.
He is now Trump’s “best friend” and is leading the Department of Government Efficiency, or DOGE, an organization within the executive branch of the government. DOGE aims to cut the federal workforce, reduce spending, and eliminate regulations.
Tesla stock peaked at $480 in December. It now trades at $274.
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Tariff concerns mount
Investors also worry about Trump’s tariffs, which could hurt Tesla’s profit.
A 25% tariff on Mexican and Canadian imports took effect at midnight on Mar. 4. This means goods and materials from these countries, where several of Tesla’s key suppliers operate, will cost more.
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UBS noted that the scenario of a 25% tariff on Mexico—and Canada-made vehicles and parts weren’t fully priced by the market “in expectation of a potential last-minute deal between the countries, which hasn’t happened,” thefly.com reported.
Analysts reset Tesla price targets amid slump
Bank of America lowered its price target on Tesla to $380 from $490, reiterating a neutral rating on the shares.
“TSLA’s stock has been under pressure in recent weeks due to concerns about new vehicle sales dropping 45% YoY in the EU in January, sentiment on the brand potentially souring, no news on the low-cost model launch (expected in 1H25), and risk to the Robotaxi launch,” the firm said in a Mar. 4 report.
Meanwhile, Morgan Stanley reinstated Tesla as a “Top Pick” in U.S. autos, though noting that shares are down nearly 30% year-to-date due to a “clear buyers’ strike,” according to thefly.com.
The analyst said Tesla’s deliveries for 2025 could decline year-over-year, creating “an attractive entry point to our preferred embodied AI name.”
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Tesla’s softer auto deliveries are “emblematic of a company in the transition from an automotive ‘pure play’ to a highly diversified play on AI and robotics,” the analyst added.
Morgan Stanley maintained an overweight rating and a $430 price target on Tesla shares.
Tesla stock peaked at $480 in December. It now trades at $274.
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