Tesla stocks have fallen dramatically during the first four months of 2025. Does the company have something that can help revive the stock and investor confidence?
It shouldn’t come as any surprise to anyone that Tesla stock has dropped dramatically over the last few months. In fact, since it first became a publicly traded company, the rule has been that this company experiences wild swings in its price and investors have to live with these massive changes if they want to capitalize on the stock when it goes back up. Of course, its hard to predict when it will rise again, considering its already dropped 39% compared to the price at the end of 2024.
Why is Tesla slumping?
Do you expect the price of stocks to remain constant, or make a gradual incline during your entire time investing in them? If so, you’re investing incorrectly. Stocks go up and down all the time, and the entire market can be in a bear or bull time, depending on what’s happening.
Here are some reasons why Tesla stock is slumping this year:
Sales are falling
Everything that goes up must come down. That’s not entirely true, but the incredible growth that electric vehicles experienced over the past few years wasn’t sustainable. This is especially true considering that many EV companies have slowed down the development of new and better technology. That doesn’t mean they aren’t still working on new items; it’s just that EVs are becoming more commonplace, which has slowed sales.
At the end of 2024, EV sales were down 8% for the fourth quarter, which translates to $19.8 billion worth of lost revenue. Total revenue was up from the previous year but below the expectations of many analysts.
Tesla only makes electric vehicles, which means the company has all its proverbial eggs in one basket. This means the EV market could make or break the company.
Tesla overvalued
Is Tesla stock overvalued? For some, it seems to be the case, at least on paper. The stock lost nearly half its value since mid-December. Elon Musk expects to solve vehicle autonomy, which means he thinks his company will be the first to market with self-driving vehicles. While he might be right, he’s already been saying this for the past nine years, which means he’s beginning to sound like the boy who cried wolf.
Unless regulations aren’t part of the mix, most automakers face an uphill battle when it comes to self-driving vehicles. Autonomy is the only way that Musk can project Tesla as more than just a car company; it’s not the only company working on autonomous vehicles; in fact, nearly every automaker is working on this. Will Tesla be first to market? We’ll see.
Elon Musk could be a problem
Many potential Tesla customers have turned away based on Musk’s support of the current president and Elon’s role in helping reduce government jobs across various agencies. Some of the comments made by Musk regarding veteran affairs, social security, Medicare, and the national parks have angered many Americans.
The topper of the public ire toward Musk could have peaked during a commercial-style appearance with Musk outside the White House selling a Tesla to the current president. This is both ludicrous and despicable because the president is not allowed to drive on public roads, and it seems wealthy business owners shouldn’t act this shamelessly.
Things to consider before investing in Tesla
Stock Performance in 2025
- Tesla stock is down over 47% YTD, dropping from ~$480 to ~$242 (as of mid-April).
- Triggered by weak delivery numbers, margin pressures, and investor concerns over Elon Musk’s public image.
Technical Indicator: Death Cross
- Tesla’s stock recently formed a “death cross,” a bearish signal where the 50-day MA crosses below the 200-day MA.
Investor Sentiment
- Analysts are mixed: some see long-term potential tied to tech developments; others are cautious due to near-term risks.
Full Self-Driving (FSD) Rollout
- Elon Musk is pushing for unsupervised FSD in select U.S. cities (Texas, California) by the end of 2025.
- Regulatory approvals and public trust are major hurdles.
Robotaxi Ambitions
- Tesla secured a CPUC permit for employee ride services, signaling early steps toward commercial robotaxi deployment.
- Competing against Waymo, Cruise, and other autonomous players.
What’s at Stake
- Success of FSD and robotaxi programs could shift the narrative and drive a stock rebound.
- Failure or delays could deepen investor skepticism and weigh further on valuation.
What to expect
Analysts are spit as to where Tesla stock prices could go over the next year. Some experts say the stock could tumble further to $120 per share, but others expect it could rebound and reach $550 per share before the end of the year.
