Tesla suffered its worst trading day in more than four years, with its shares falling 15% on Monday on growing concerns about slowing demand for the company's electric vehicles. The decline continued a difficult 2025 for Tesla, which has already lost 45% of its value since the beginning of the year, according to Bloomberg.
The Tesla stock selloff followed a revised supply forecast from UBS Group AG analyst Joseph Spak, who cut his estimates for Tesla's first-quarter and full-year sales. Similarly, Robert W. Baird & Co. analyst Ben Kalo also cut his forecasts last week, reflecting growing pessimism on Wall Street about the company's future.
Spak now expects Tesla to deliver just 367,000 vehicles this quarter, down 16% from his previous forecast. He also no longer expects sales to grow in 2025, predicting a 5% decline from last year. That contrasts sharply with analysts’ forecasts of 10% growth by Bloomberg, as well as assurances from Tesla management that the company will return to growth.
“We expect the updated Model Y to improve the situation, but demand remains weak,” Spak wrote in an analytical note to clients. He noted the short delivery times in China (just 2-4 weeks), which indicate an insufficient level of orders.
In addition to delays related to the Model Y update, Tesla's image is taking a hit in major electric car markets, in part because of controversial statements by Elon Musk. In Germany, in particular, registrations of new Teslas fell by 70% in the first two months of 2025. Experts believe that Musk's political statements regarding the German election may have alienated consumers. And in China, Tesla is losing competition to local giant BYD. Deliveries from the company's Shanghai factory fell 49% in February, totaling just 30,688 vehicles - the lowest level since July 2022.
Monday's 15% drop was Tesla's worst one-day drop since September 2020. The company lost all the gains its shares had made since Donald Trump won the US presidential election in November.
Amid weakening demand, growing competition from traditional automakers and Chinese brands, and Elon Musk's personal scandals, investors are increasingly skeptical of Tesla's ability to maintain its dominance in the electric vehicle market.