The EV king Tesla is breaking down — sales are slumping, brand is bruised, and Wall Street is losing faith.
- Tesla (TSLA) stock is down 28% year-to-date, underperforming every other megacap tech name.
- A looming death cross could trigger more selling pressure as the 50-day MA sinks below the 200-day.
- Q1 deliveries fell 17% sequentially, Tesla’s first YoY sales decline in 3 years.
- US sales are worse than reported — down closer to 15%, not 8%, when Canada is excluded.
- In the EU, January sales collapsed 45%, while the broader EV market surged 37%.
- Musk’s political entanglements and DOGE department role are damaging brand perception — even longtime bulls admit it.
- Tesla has record US inventory and no backlog for Model Y.
- Analysts like Dan Ives have slashed price targets by 43%, citing valuation and eroding demands.
More about: Tesla Cybertruck Sales Plunged Sharply In First Quarter
What’s Going On?
Tesla’s chart is sending a warning. A “death cross” — where the 50-day moving average crosses below the 200-day — will likely hit this week. It’s a technical red flag that often signals extended downward momentum.
But the technicals are just one layer. The real story is what’s happening under the hood.
Tesla’s Q1 2025 vehicle deliveries fell to 336,681, down 13% YoY and the lowest quarterly figure in three years. Global EV sales, meanwhile, rose — meaning Tesla’s losing share, not just volume.
The drop in the U.S. is worse than it looks. While Cox Automotive estimated 128,100 deliveries in Q1 (down 8.6%), better data triangulated from registration numbers pegs that number closer to 123,000, after removing Canadian sales. That’s closer to a 15% drop in Tesla’s home market — a red flag.
The EU tells a similar story: Tesla’s sales fell off a cliff in key markets while the EV market kept rising. And in China, the company is now facing 145% U.S. tariffs and 125% Chinese retaliation, while competitors like BYD dominate.
Tesla is still profitable — and far ahead of Lucid, Rivian, and Fisker in margins. But it’s not growing, and that’s a problem when your stock still trades at a 98x forward P/E.
The Musk Problem
Elon Musk’s political pivot is also proving costly. As head of the Trump administration’s DOGE (Department of Government Efficiency), Musk’s polarizing moves have triggered protests, vandalism, and consumer backlash — especially in Europe.
Wall Street isn’t ignoring it. JPMorgan says Tesla is suffering “unprecedented brand damage.” Tesla bulls like Dan Ives are revising their outlook, noting the stock’s premium valuation “no longer matches fundamentals.”
Tesla’s once sky-high brand has slipped into controversial territory, especially among urban consumers, women, and the environmentally focused base that fueled its early adoption.
Can Tesla Turn It Around?
Tesla’s pitch to investors is that it’s no longer just a car company. It’s building humanoid robots (Optimus), pushing self-driving tech, and expanding into energy. Musk claims the robot biz could hit $10 trillion in sales. But these moonshot ideas have long timelines — and zero material revenue now.
The core auto business still drives ~80% of sales. With that business contracting and the EV market becoming brutally competitive, Tesla will need more than a robot prototype to hold its valuation.
Market Outlook
Tesla’s rebound after the tariff reprieve was short-lived. Investors now face macro and micro risks: rising rates, Chinese retaliation, and brand risk tied directly to Musk.
Until Tesla shows it can reignite demand — or monetize its futuristic bets — the stock’s lofty valuation remains hard to justify.
Tesla isn’t dead. But it’s no longer invincible. The dip may be tempting, but it’s not cheap — not yet.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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Sources:
Electrek – Tesla’s U.S. sales are worse than what is reported — here’s more accurate data
MarketWatch – Tesla’s stock is set for a ‘death cross’ on Monday — 3 reasons why it’s a risky buy
Yahoo Finance – Is Tesla Stock a Buy Now?
Yahoo Finance – Tesla Stock Is Down 28%. Time to Buy the Dip?
