5 Reasons Why Tesla Stock is Stuck in a 9-Week Slump

Tesla (TSLA) stock has plummeted about 48.9% from its December 2024 peak of $488, erasing all of its post-election gains amid declining global sales and growing competition. During a surprise all-hands meeting this week, CEO Elon Musk urged employees to retain their stock despite what he termed "Armageddon" levels of negative media coverage, while announcing ambitious plans to build 5,000 Optimus humanoid robots this year.

Despite a late-week rally, TSLA just closed lower for the ninth week in a row. Here’s a look at what’s driving TSLA stock lower - and a couple of things that are actually going right for the beaten-down EV giant.

#1. Sales Declines

Tesla is experiencing particularly steep sales declines in key markets, with February deliveries down 76% in Germany, 49% in China, 70% in Australia, and 41% across the top nine European markets. Adding to the company's challenges, Tesla has announced its eighth Cybertruck recall, affecting over 46,000 vehicles due to potentially detaching exterior panels.

#2. Stiff Competition

While Tesla sales have been sliding, competitors like BYD (BYDDY) are announcing breakthrough technologies such as 5-minute charging capabilities. Likewise, Xpeng (XPEV) expects deliveries to more than double this year - an upbeat forecast that’s reflected in XPEV’s stock price.

#3. DOGE Controversies

Musk's highly visible role in the Trump administration and the Department of Government Efficiency (DOGE) has sparked controversy, leading to protests and vandalism at Tesla dealerships. The situation has resulted in record levels of Tesla trade-ins, with Edmunds reporting a surge to 1.4% of all vehicles in March 2025, up from 0.4% the previous year. 

#4. Heavy Insider Selling at Tesla

Tesla insiders have been unloading the stock, including Chair Robyn Denholm and board member Kimbal Musk. Investors should note that these sales were carried out under Rule 10b5-1 plans adopted prior to the stock’s election-related surge, which means they’re not a particularly good indicator of current insider sentiment.

Additionally, longtime insiders at growth companies like TSLA are often compensated heavily in stock, which means these well-placed insiders are often relatively unlikely to purchase company stock on the open market - even at times it might be considered “cheap.” So while Tesla investors might prefer to see insiders purchasing stock, even just as a vote of confidence, there’s simply not a lot of strength to be taken away from this sentiment signal regardless.

#5. Analysts Are Turning Bearish

Wall Street analysts have broadly cut their price targets and delivery forecasts, with firms like RBC reducing targets from $440 to $320 and Mizuho lowering 2025 delivery estimates from 2.3 million to 1.8 million vehicles. Wells Fargo slashed its Tesla price target all the way to $130, suggesting the brokerage firm expects about 47.7% additional downside from Friday’s close.

While some analysts maintain optimism about Tesla's long-term prospects in autonomous driving and robotics, the company faces significant near-term headwinds from operational challenges, political complications, and weakening demand. Against this backdrop, even bulls like Dan Ives at Wedbush are growing impatient. 

What’s Going Right for Tesla?

In fairness, not all of the news has been negative for Tesla lately. The company has expanded its presence in India through partnerships with Tata Group companies, securing approximately $2 billion worth of components annually. Tesla is also offering free trials of its Full Self-Driving software in China and has received limited approval for ride-hailing operations in California, which is viewed as a step toward an eventual Robotaxi service.

However, for investors looking to scoop up TSLA stock at a bargain price, it’s probably best to wait until the current bout of volatility stabilizes before diving into the shares.