TLDR
- Tesla stock has fallen 53% from mid-December highs, heading for a ninth straight weekly loss
- BYD unveiled new charging technology that delivers 400km range in just 5 minutes, outpacing Tesla’s capabilities
- Chinese competitor Zeekr is offering advanced driver-assistance systems for free while Tesla charges for FSD
- Tesla’s sales dropped significantly in China (49% YoY) and Europe (45% YoY) as consumers choose competitors
- Investors express concerns about CEO Elon Musk’s divided attention with his DOGE responsibilities in the Trump administration
Tesla’s stock decline accelerated this week, with shares dropping 5% on Tuesday. The electric vehicle maker is heading towards its ninth consecutive week of losses as competition intensifies and sales slow globally.
The stock has now plummeted 53% from the record highs it reached in mid-December. This dramatic fall has wiped out hundreds of billions in market value.
BYD, Tesla’s Chinese competitor, unveiled an EV-charging station that delivers impressive performance. The company claims it can provide up to 400 kilometers of driving range after just five minutes of charging.
This represents a major technological leap compared to Tesla’s fastest Superchargers. Tesla’s quickest charging option provides 275 kilometers of range after 15 minutes of charging.
BYD’s charging speed is double what Tesla offers. The Chinese company’s chargers operate at 1,000 kilowatts, twice the power of Tesla’s fastest options.
BYD believes this advancement could accelerate EV adoption. The company plans to build 4,000 of these fast-charging stations across China, further challenging Tesla’s position.
Meanwhile, another Chinese competitor is making moves that could hurt Tesla’s revenue model. Zeekr, owned by Geely Auto, is reportedly offering its advanced driver-assistance system to Chinese customers at no cost.
This contrasts with Tesla’s approach of charging monthly fees for its Full Self-Driving technology in the U.S. unless customers pay for it upfront with their vehicle purchase.
Tesla’s sales figures have disappointed investors this year. The company’s China shipments fell 49% year-over-year in February to 30,688 vehicles, the lowest number since August 2022.
A similar pattern emerged in Europe. January Tesla purchases in the region dropped 45% compared to the previous year. This decline came despite overall European EV sales jumping 37%.
The downward trend continued in February, with Tesla sales in Germany falling by a steep 76%. These figures suggest consumers are increasingly choosing other EV options over Tesla.
Analysts have scaled back their projections
Wall Street analysts have responded by scaling back their projections. RBC maintained an “outperform” rating but cut its price target to $320 from $440.
Analyst Tom Narayan expects lower pricing on Tesla’s self-driving technology as autonomous features become standard across the EV industry. Given heightened competition in Europe and China, Narayan lowered robotaxi-penetration assumptions.
“As a result, we now lower our market share assumption to 10% from 20% in both markets,” Narayan wrote in his report.
RBC’s adjusted forecast adds to a series of downgrades affecting Tesla. Last week, JPMorgan lowered its price target by approximately 41% to $135 per share, citing reduced guidance on vehicle deliveries.
Investors have expressed concerns about Musk’s commitment
Investors have also expressed concerns about CEO Elon Musk’s commitment to the company. Musk, whose innovative reputation helped drive Tesla’s stock to previous records, appears increasingly distant from day-to-day operations.
Critics point to his expanding role in the Trump administration. Musk now heads the Department of Government Efficiency (DOGE), taking on substantial government responsibilities.
Musk himself has acknowledged the challenge, noting “great difficulty” in dividing his attention between DOGE and his various companies. This admission likely troubled investors who want more focused leadership.
“We think shareholders have legitimate concerns about Elon Musk being spread too thin, and it’s become clear he’s now spending more time on DOGE than anything else,” Garrett Nelson, CFRA’s senior equity analyst, told Business Insider.
The China market remains essential for Tesla’s growth strategy. However, the company now faces not just more competitors but rivals with potentially superior technology.
Tesla’s market cap currently stands at $725 billion, with the stock trading at $232.35 as of the latest market data. The 52-week range shows considerable volatility, spanning from $138.80 to $488.54.
As competition intensifies and sales decline, Tesla faces pressure to innovate and address these mounting challenges to regain investor confidence and reverse its declining stock trend.
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