Tesla Selloff Deepens With Stock Down 15%

Tesla’s stock has faced significant turbulence recently, failing to recover despite hopes that political uncertainties would settle. On Monday, the electric vehicle (EV) giant’s shares dropped 15.4% to $222.15, continuing a downward trend fueled by concerns over weak sales data, economic uncertainty, and a revised delivery forecast from a key Wall Street analyst.

Joseph Spak, an analyst at UBS, cut his first-quarter Tesla delivery estimate to 367,000 vehicles—down from 437,000. His 2025 forecast now stands at 1.7 million vehicles, a sharp contrast to Wall Street’s consensus of approximately two million.

Spak didn’t attribute the adjustment to CEO Elon Musk’s political activities or external controversies but instead pointed to concerning trends in Tesla’s lead times, pricing strategies, and early-year sales data. He reaffirmed his Sell rating on Tesla stock and lowered his price target from $259 to $225 per share.

Monday’s decline puts Tesla’s stock below its pre-election level of $251.40. Since its October 10 robo-taxi event, where Musk introduced plans for a self-driving taxi service, shares have fallen about 12%.

The bigger picture is even more concerning. Tesla’s stock has plunged 45% in February and March, making it one of its worst two-month stretches ever. The only comparable drop occurred in November-December 2022, when shares tumbled 46% following Musk’s acquisition of X.

The broader market also struggled on Monday, with the S&P 500 down 2.7% and the Dow Jones Industrial Average falling 2.1%. Adding to investors’ concerns, former President Donald Trump’s Sunday interview on Fox Business suggested the possibility of a 2025 recession, contributing to a broader selloff in stocks.

Adding a strange twist to Tesla’s current situation is the unexpected role of DOGE (Department of Government Efficiency). Created under Trump’s administration, DOGE has become a controversial topic, sparking protests against both the government and Tesla due to Musk’s involvement.

Interestingly, Google searches for “DOGE” peaked on February 20, even surpassing searches for “Tesla” that day. Some investors see this as another source of risk for Tesla, as Musk’s ties to the department have created additional market uncertainty.

Despite Tesla’s current struggles, Wedbush analyst Dan Ives remains optimistic. He maintains a Buy rating on Tesla stock with a $550 price target, arguing that the company is on the brink of unlocking trillions in value. Ives points to Tesla’s advancements in AI-powered autonomous taxis and humanoid robotics as potential game changers.

While DOGE-related concerns might fade, the broader issue of market sentiment will take longer to stabilize. Investors will be watching Tesla’s delivery numbers, economic trends, and AI initiatives closely in the coming months.