TLDR
- Tesla stock has declined over 13% in 2025, losing more than $300 billion in market value since mid-December
- Concerns grow about Elon Musk’s divided attention between Tesla and his role in Trump’s DOGE initiative
- Tesla faces declining sales in key markets (China down 11.5%, Germany down 59.5%) amid increasing competition
- Technical analysis shows the stock breaking below its 50-day moving average and a head and shoulders pattern
- Wedbush analyst Dan Ives maintains an outperform rating with a $550 price target despite the challenges
Tesla shares have continued their downward trajectory in 2025, extending losses to more than 13% year-to-date and shedding over $300 billion in market value since mid-December. The electric vehicle maker’s stock closed at $330.53 on Monday, down 2.2% for the day, making it the weakest performer among the “Magnificent 7” tech stocks this year.
The decline comes as investors grow increasingly concerned about CEO Elon Musk’s divided attention between Tesla and his political endeavors. Musk has taken on a key advisory role to President Donald Trump and leads the Department of Government Efficiency (DOGE), a cost-cutting group empowered by the White House.
A recent Washington Post-Ipsos poll showed Musk has a net approval rating of just 34% for his DOGE efforts. The poll highlighted public concern about inaccurate statements on savings and the sharing of misinformation on his X social media platform.
Wedbush analyst Dan Ives, a longtime Tesla bull, acknowledges these worries but remains optimistic. “The worry of Wall Street is that Musk dedicating so much time to DOGE takes away from his time at Tesla in such a crucial moment and year for the company,” Ives noted in a Monday report.
Despite these concerns, Ives reiterated his outperform rating for Tesla with a $550 price target. He believes that “Tesla is accelerating into an autonomous/robotics future” and that Musk will “successfully balance his Tesla CEO role along with Doge, SpaceX, xAI and myriad other initiatives.”
Beyond the Musk factor, Tesla’s struggles appear more deeply rooted in market fundamentals. The company reported its first year-on-year sales decline on record in its fourth quarter earnings and has seen slumping early 2025 deliveries in key overseas markets.
In China, Tesla’s sales last month fell to 63,238 units, down 11.5% from a year earlier. Meanwhile, domestic rival BYD saw its sales rise by 47.5% to 296,446 units. The contrast between these figures highlights the increasing competition Tesla faces in the world’s largest EV market.
Germany has proven even more challenging for Tesla, with sales plunging 59.5%. This dramatic drop coincides with Musk’s public support for the far-right AfD party ahead of recent federal elections, suggesting that his political activities may be eroding the brand’s appeal in certain markets.
The company has also scaled back its ambitious growth targets. Having once boasted of delivering 20 million vehicles annually by 2030, Tesla now projects around 5 million units. The much-hyped Cybertruck has failed to capture the public’s imagination as expected, further dampening investor enthusiasm.
Tesla’s stock shows additional concerning signals
From a technical analysis perspective, Tesla’s stock shows additional concerning signals. The shares have broken down below the 50-day moving average and the neckline of a head and shoulders pattern earlier this month, suggesting further downside potential.
Investors are now watching key support levels on Tesla’s chart. The $325 level, which was briefly breached on Monday, represents the first important support area. If this fails to hold, the stock could fall to around $265, which sits near the 200-day moving average.
During potential upswings, the $430 area might provide resistance near the head and shoulders pattern’s right shoulder. A move above this could target the $489 level, close to the stock’s record high.
Despite the current challenges, Ives points to several potential catalysts on the horizon. “Tesla is gearing up for a new mass-market-vehicle launch in first-half 2025, making major product developments around autonomous/Optimus robots across its global production ecosystem,” he noted.
The analyst highlighted that Full-Self-Driving tests are scheduled to launch this spring in Tesla’s Austin headquarters. “We believe a new vehicle launch in the coming week, with Model Y Juniper along with the Austin FSD unsupervised kickoff in June, will be key events and catalysts,” Ives added.
For now, investors must weigh these potential future developments against the immediate concerns about Musk’s divided attention and Tesla’s weakening competitive position in key markets. The stock’s performance in the coming months will likely depend on whether the company can deliver on its autonomous driving and product launch promises while regaining momentum in international markets.
The broader market will also be watching to see if Musk can effectively balance his various roles without compromising Tesla’s operational focus during what many analysts describe as a critical period for the electric vehicle manufacturer.
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