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Tesla’s (Nasdaq: TSLA) stock has taken a major hit in 2025, falling 45% so far this year- making it the worst-performing stock in the S&P 500. 

After soaring to record highs following the presidential election, Tesla’s rapid decline has been driven by weak sales, disappointing deliveries, and growing political and market challenges.

Weak Start to 2025

Tesla’s sales have dropped sharply in early 2025, particularly in China and Europe.

The launch of a new Model Y could help boost demand, but low wait times suggest limited interest.

In many parts of the U.S. the new Model Y is available for immediate delivery – a sign that demand isn’t as strong as expected. 

Rising competition from Chinese EV makers and price cuts from rivals like Ford and Rivian have also made it harder for Tesla to maintain its market share.

Slowing consumer demand for EVs overall could add to the pressure in the coming months.

Delivery Issues

CEO Elon Musk had predicted strong delivery growth for 2024 and 2025, but the reality has been disappointing.

Deliveries fell slightly last year, and Tesla now expects only modest growth at best in 2025. 

Some analysts believe Tesla’s sales may remain flat or even decline this year, prompting them to cut earnings forecasts.

If Q1 sales disappoint, more downward revisions are likely.

Cybertruck Challenges

Tesla initially claimed the Cybertruck was profitable, but that was likely due to early high-end “Foundation Series” sales with higher margins.

Now that Tesla is selling more affordable models, like the dual-motor version at $79,990, profit margins have tightened, and the Cybertruck is likely losing money.

Production issues have also added to the pressure.

The complex stainless steel design has made manufacturing difficult and costly, leading to delivery delays and limited volume.

Demand for the Cybertruck appears mixed. While early adopters showed strong interest, recent reports suggest shrinking backlogs, indicating weaker demand.

Competition from rivals like Ford and Rivian, which offer more affordable and reliable options, has also increased pressure.

Tesla’s ability to scale production and improve profitability will be key to its success in the EV truck market.

Musk’s Political Ties

After the election, investors expected Musk’s close ties to the administration to benefit Tesla.

However, Musk’s controversial social media posts and political activity have hurt Tesla’s brand, especially in Europe. 

His public conflicts with politicians and foreign leaders have further damaged the company’s image, leading to protests and declining sales in key markets.

Robotaxi Uncertainty

Musk promised that Tesla would start offering unsupervised robotaxi rides in Texas and California by mid-year.

However, Tesla’s Full Self-Driving (FSD) technology still appears far from being able to operate without human oversight. 

This raises doubts about whether Tesla can deliver on its ambitious robotaxi plans anytime soon.

Regulatory challenges and safety concerns could further delay the rollout, adding to investor uncertainty.

Technical Analysis

Weekly signals on the Ichimoku chart are bearish, with the RSI at a low 20.31, indicating oversold conditions.

Market sentiment remains neutral, and the stock’s valuation is considered fair. 

For investors considering adding Tesla to their portfolio, here are some suggested Buy Limit entry points: 

 $201.24

  $178.72

  $145.34.

Remember: Investing is personal, and what is right for me might not be right for you. Always do your own due diligence. You should ONLY invest based on your own risk tolerance and your timeframe for reaching your portfolio goals.

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Outlook

Tesla stock has a history of big swings, and it made a strong comeback late in 2024 after early struggles.

However, many of the growth drivers that fueled that rally have now faded.

Weak sales, political fallout, and uncertainty around Tesla’s robotaxi plans continue to weigh on the stock’s outlook. 

With growing competition in the EV market and ongoing production challenges, Tesla may face increased pressure to meet investor expectations.

A successful robotaxi rollout or improvement in delivery growth could help restore confidence.

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