Tesla Stock Plunges 7%: Competition, Sales Slump, and Musk’s Focus Shake Investor Confidence

Tesla Stock Plummets Amid New Competition and Analyst Downgrades

Tesla’s stock continued its downward spiral on Tuesday, dropping 7% and marking what could be its ninth consecutive weekly loss. The electric vehicle giant’s shares have now plunged 53% from their mid-December peak, as multiple factors contribute to investor concerns.

One of the latest challenges comes from Chinese competitor BYD, which recently unveiled a groundbreaking EV charging station. The new technology offers a 400-kilometer range after just five minutes of charging, posing a significant threat to Tesla’s market share, particularly in China. BYD plans to install 4,000 of these advanced chargers across the country, further intensifying competition in the world’s largest EV market.

Wall Street analysts have also adjusted their forecasts, adding to the pressure on Tesla’s stock. RBC cut its price target from $440 to $320 while maintaining an “outperform” rating. Analyst Tom Narayan cited expectations of lower pricing for Tesla’s self-driving technology and increased competition in Europe and China as reasons for the downgrade. This move follows JPMorgan’s recent reduction of its price target to $135 per share.

Tesla’s challenges extend beyond new competition and analyst skepticism. Global sales data indicate a shift away from the brand to other EV manufacturers. In China, Tesla’s vehicle shipments dropped 49% year-over-year in February. European markets have also seen significant declines, with sales falling 45% in January and a staggering 76% decrease in Germany in February.

Investor concerns are further compounded by growing frustration over CEO Elon Musk’s divided focus. Musk’s involvement with the Trump administration and the Department of Government Efficiency has raised questions about his ability to effectively manage Tesla. The CEO’s own admission of difficulty in managing his time between various responsibilities has only heightened these worries.

As Tesla grapples with these multifaceted challenges, industry analysts like Garrett Nelson from CFRA have voiced concerns about Musk being “spread too thin.” The coming weeks will be crucial in determining whether Tesla can reverse its stock’s downward trend and address the mounting pressures facing the company.