TLDR
- Tesla stock has fallen 53% from its December 2024 record high of $479
- Global sales appear to be declining significantly, with 43% drop in Europe and potential declines in China
- Q1 delivery numbers expected April 2 could disappoint investors
- CEO Elon Musk held an all-hands meeting to reassure employees, urging them to “hang on to your stock”
- Model Y production pause for redesign contributing to delivery slowdown
Tesla shares have plummeted more than 50% from their record high set in December 2024, as the electric vehicle maker faces mounting challenges in its core automotive business.
The stock reached an all-time high of $479 at the end of 2024 following President Trump’s election victory. Investors were optimistic about potential regulatory changes that could benefit Tesla’s autonomous driving and robotics initiatives.
However, that enthusiasm has given way to concern as Tesla’s share price has since dropped by 53% to around $235.
The steep decline comes amid troubling signs for Tesla’s electric vehicle sales, which still account for 79% of the company’s revenue.
Recent reports indicate Tesla’s sales are falling sharply in key markets worldwide. In Europe, deliveries plunged 43% during January and February compared to the same period in 2024.
The situation appears particularly dire in Germany, where sales dropped 70%. Denmark saw a 48% decline, while Sweden and Portugal both experienced 45% decreases.
Australia has also seen dramatic reductions, with a 33% sales drop in January that accelerated to 70% in February.
China, which typically represents about a third of Tesla’s total sales, may also show declining numbers for the first quarter of 2025.
Musk Responds to Market Concerns
In response to the stock slide, CEO Elon Musk held an all-hands meeting with employees that was broadcast on X. During the late-night session in Austin, Musk attempted to reassure his workforce during what he called “a little bit of stormy weather.”
“If you read the news, it feels like Armageddon,” Musk told employees. He joked about media coverage, saying he “can’t walk past a television without seeing a Tesla on fire.”
Musk reiterated his longstanding claim that Tesla vehicles will soon be capable of driving autonomously. “What I’m saying is hang on to your stock,” he advised employees.
The CEO also highlighted that the Model Y remains “the best-selling car on Earth, of any kind,” despite recent sales challenges.
Production Changes and Future Outlook
Part of Tesla’s current delivery slowdown stems from a production pause for its most popular vehicle, the Model Y, as the company reworks production lines for a redesigned version.
Tesla previously delivered 1.78 million cars during 2024, marking a 1% decline compared to 2023. This represented the company’s first annual sales drop since launching the Model S in 2011.
The upcoming quarterly delivery report, expected on April 2, will provide crucial insight into whether these concerning trends have continued or worsened in early 2025.
Tesla has announced plans to launch new, more affordable models in the first half of this year, though details remain limited about what these vehicles will be.
Musk concluded the employee meeting on an optimistic note, saying, “There are times when there are rocky moments. But what I’m here to tell you is that the future is incredibly bright and exciting, and we’re going to do things that no one has even dreamed of.”
The CEO’s political involvement has also affected Tesla’s public perception. Protesters have targeted Tesla showrooms, vehicles, and charging stations in the U.S. and across Europe in response to Musk’s role in the Trump administration.
This backlash prompted President Trump to arrange a parade of Teslas on the White House South Lawn. Additionally, Commerce Secretary Howard Lutnick appeared on Fox News urging viewers to buy Tesla shares, saying, “It’ll never be this cheap again,” potentially violating ethics rules.
Dan Ives, a Wedbush Securities analyst and longtime Tesla supporter, described the all-hands meeting as a “first step for Musk to show he is going to lead Tesla through this tumultuous period.”
Ives had earlier urged Musk to reduce his involvement with the Trump administration and refocus on Tesla, warning that brand damage had escalated into a “tornado crisis moment for Musk and Tesla.”
When asked about expanding into other transportation sectors, Musk mentioned he’s considered making airplanes but is “stretched pretty thin” with his “17 jobs.”
Nevertheless, he speculated about potentially developing an electric, supersonic vertical take-off and landing jet in the future.
For investors considering Tesla stock ahead of the April 2 delivery report, the question remains whether the current price represents a buying opportunity or if further declines lie ahead.
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