Tesla stock (TSLA) faced a steep decline on Monday, plummeting more than 15% as concerns over demand and bearish analyst calls weighed heavily on investor sentiment. This marked the worst single-day loss for Tesla stock price since September 2020, sending TSLA stock to its lowest level since before the 2024 U.S. presidential election. With this drop, Tesla stock has now erased all its post-election gains and is down over 50% from its record high of $479 on December 17.
UBS Downgrade Hits TSLA Stock Hard
The latest blow to Tesla stocks came from UBS, which slashed its price target on TSLA stock to $225 from $259, maintaining a “Sell” rating. The downgrade was primarily driven by lower-than-expected delivery forecasts for the first quarter. UBS now anticipates Tesla will deliver 367,000 vehicles in Q1, significantly lower than the previous estimate of 437,000. The firm noted that Tesla’s Model 3 and Model Y are seeing lower demand, with delivery times dropping to under two weeks in key markets—an indicator of weak consumer interest.
Moreover, Tesla’s shipments in China fell by 49% year-over-year in February, reaching their lowest level in nearly three years. The decline in one of Tesla’s most crucial markets further pressured Tesla stock price today, intensifying concerns about its global demand outlook.
Tesla’s Steep Decline and Market Reactions
Since the start of March, TSLA stock has fallen over 20%, continuing a broader downward trend. The sharp drop is seen as part of a larger “Trump trade unwind,” a market reaction reflecting shifting investor sentiments since the 2024 election.
Despite these headwinds, some Wall Street analysts remain bullish on Tesla stock. Wedbush analyst Dan Ives defended TSLA stock, calling the sell-off a “gut check moment” for Tesla bulls, including himself. Ives reiterated an Outperform rating with a $550 price target, arguing that Tesla has endured similar drawdowns in the past while remaining a “unique disruptive global tech story.”
Morgan Stanley’s Adam Jonas also reaffirmed his optimistic stance, setting a $430 price target for TSLA stock price today. He believes Tesla is transitioning from an automaker into a diversified company focused on artificial intelligence and robotics. Jonas suggested that while Tesla’s auto deliveries might decline in 2025, this could create an “attractive entry point” for investors.
Elon Musk’s Influence and Political Fallout
Beyond market forces, some analysts suggest that Tesla’s stock decline may also be influenced by CEO Elon Musk’s increasing involvement in politics. Musk became a key surrogate for Donald Trump’s 2024 presidential campaign, which has led to backlash among some Tesla customers. Reports indicate that Tesla sales in Europe have declined, while U.S. showrooms have seen protests following Musk-led layoffs in the federal government through the Department of Government Efficiency (DOGE). A Quinnipiac poll from January found that 53% of voters opposed Musk having a prominent role in the Trump administration, potentially affecting Tesla’s brand perception.
What’s Next for Tesla Stocks?
With Tesla’s Q1 earnings report scheduled for April 22, all eyes are on whether the company can address its demand challenges and reassure investors. If delivery numbers disappoint further, TSLA stock could see additional downside pressure. On the other hand, any positive guidance on AI and robotics initiatives may help offset current market pessimism.
As Tesla stocks navigate these turbulent times, investors will be closely watching not just delivery numbers but also Elon Musk’s strategic decisions, as both continue to shape Tesla’s future trajectory.
Frequently Asked Questions (FAQs)
1. Why did Tesla stock drop 15%?
Tesla stock dropped due to weak demand for Model 3 and Model Y, a bearish UBS downgrade, and a significant decline in China sales.
2. What is Tesla’s current stock price target?
UBS has cut its Tesla stock price target to $225, while Morgan Stanley and Wedbush remain bullish with targets of $430 and $550, respectively.
3. How have Tesla’s deliveries been affected?
UBS estimates Tesla’s Q1 deliveries will drop by 26% from the previous quarter, signaling weakening demand and production challenges.
4. Is Elon Musk’s political involvement affecting Tesla stock?
Yes, Musk’s alignment with Donald Trump has led to brand backlash, European sales declines, and protests at Tesla showrooms.
5. Will Tesla stock recover from this decline?
Analysts remain divided. Some see this as a short-term setback, while others believe Tesla’s focus on AI and robotics could drive long-term growth.
