Tesla’s stock suffered a sharp sell-off during Monday's (Tuesday AEDT) United States session, plummeting 15.4% and marking its worst trading day since September 2020.
The electric vehicle maker has now logged seven consecutive weeks of losses, its longest losing streak since its Nasdaq debut in 2010.
Shares have been under relentless pressure since CEO Elon Musk took on a significant role in the Trump administration, fueling investor concerns over Tesla’s brand perception and political entanglements.
On Monday, UBS analysts cut Tesla’s price target from $259 to $225, citing weaker-than-expected demand for the Model 3 and Model Y. The firm now forecasts first-quarter deliveries at 367,000, significantly lower than its previous estimate of 437,000.
UBS projects Tesla’s Q1 deliveries to decline 5% year-over-year and 26% quarter-over-quarter, attributing the slump to reduced wait times for Model 3 and Model Y in key markets.
"Our UBS Evidence Lab data shows low delivery times for the Model 3 and Model Y (generally within 2 weeks) in key markets which we believe is indicative of softer demand," the firm noted.
The sell-off was further exacerbated by investor anxiety over President Donald Trump’s tariff policies, which could disrupt Tesla’s supply chain. Canada and Mexico, both key markets for auto suppliers, may face higher tariffs, increasing production costs and vehicle prices.
Tesla’s struggles extend beyond market fundamentals, as Musk’s political stance and association with the Trump administration have led to brand erosion.
As head of the Department of Government Efficiency, Musk has played a key role in efforts to reduce the federal workforce and cut government spending.
Musk’s controversial remarks on social media platform X, including attacks on judges and promotion of Kremlin-aligned narratives, have further damaged Tesla’s image.
Protesters have targeted Tesla facilities across the U.S., with incidents of vandalism and arson attempts reported at its service centres.
Tesla is set to report first-quarter earnings on April 22, with investors watching closely for further signs of demand weakness and margin pressures.
At the time of writing, Tesla (NASDAQ: TSLA) stock was trading at US$218.80, easing 1.5% from Monday's close of $222.15. The stock reached a day low of $220.00 and a day high of $253.37. Tesla's market cap stands at $714.55 billion.
