Tesla stock takes 15% dive in one day

Elon Musk's EV company known the world over just experienced a sharp dive in its stock value with a 15% decline in just one day. Tesla stock has dropped by 18% since the start of March wiping out post-election gains which saw an all-time high last December 2024 at USD 479.86; Tesla's stock closed at just USD 222.15.

Tesla's valuation has significantly dropped after hitting its 1 trillion market capitalization in December. Over the last day, it plunged 15.43%. It was Tesla's worst day on the stock market since September 2020.

This comes after Tesla's latest seventh week of losses amid the brand navigating turmoil after turmoil. The recent downturn was likely the result of uncertainty surrounding US President Donald Trump's plan to impose tariffs against Mexico, Canada, and China. With Mexico and Canada key markets for automotive suppliers, the increase in tariffs will likely result in higher production and goods prices as countries brace for a possible trade war, if not already. The growing uncertainties have triggered a major selloff in the NASDAQ where Tesla is listed and the Dow Jones index as well.

The Tesla Model 3 and Model Y have also seen sharp declines in vehicle deliveries in China and Europe with competitors offering fresher EVs with longer ranges. Tesla recently introduced the updated Model Y in the Philippines and has been trying to hype up its presence.

Musk's recent foray into politics and the newly formed Department of Government Efficiency (DOGE) has also proved unpopular with customers and the public. It has resulted in protests outside Tesla showrooms not just in the US but also in other countries where Tesla has a large presence. Just last week, a dozen Tesla vehicles were set on fire in a suspected arson attack in France. In another incident in France, a Tesla dealership along with eight Tesla vehicles were damaged in an arson after an anarchist group claimed responsibility for the attack.

Tesla is repositioning itself from a purely automotive company into a tech company with its new foray into artificial intelligence and robotics to improve investor confidence and regain its value.

Financial analysts have offered mixed views on Tesla with UBS maintaining its "sell" rating on TSLA, while bulls like Dan Ives Wedbush called for a USD 550 target, and Morgan Stanley analyst Adam Jonas forecasted USD 430. We reckon the DOGE chief would have preferred a target of USD 420.