Tesla (NASDAQ: TSLA), once the darling of Wall Street, is now facing one of its steepest downturns in history. In just three months, Tesla’s stock has plummeted by 45%, wiping out billions from its market cap. The recent 15% drop in a single trading session marks its steepest fall in five years, raising concerns among investors and analysts alike.

From declining sales in Europe and Australia to controversies surrounding Elon Musk's political stance, multiple factors have contributed to this unprecedented decline. In this guide, we will analyze Tesla's recent troubles, what’s driving the stock crash, and what investors should consider before making their next move.

📉 Tesla’s Plummeting Stock: Key Numbers

• Stock Drop: Tesla shares have dropped 45% in three months and 15% in one session (CNBC).
• Market Cap Loss: Tesla has lost $700 billion in market value since its peak (New York Post).
• European Sales Decline: Sales plummeted 45% in Europe, with Norway and Germany showing particularly steep declines (Benzinga, Electrek.co).
• China’s Tesla Market Share: Tesla’s market share in China dropped to 1.9% in February, with sales falling 11% YoY (Roland Pircher on X).
• Net Worth Impact on Musk: Elon Musk’s net worth has decreased by $5.2 billion in a week (Benzinga).

🔥 What’s Driving Tesla’s Stock Decline?

1️⃣ Sales Slump in Key Markets

Tesla is experiencing significant sales downturns in some of its most important regions:

• Europe: A 45% decline, with Tesla losing its dominance in Norway and Germany (CarScoops, Electrek).
• China: Tesla’s market share shrank to 1.9%, with Model Y and Model 3 sales both down (Roland Pircher on X).
• Australia: Tesla sales in Australia have dropped more than 81% year-over-year (The Driven).
• US Market Uncertainty: Domestic EV demand has shown volatility due to increasing competition from legacy automakers and economic factors.

2️⃣ Political Controversies & Public Perception

Elon Musk’s outspoken political stances have become a significant factor impacting Tesla’s brand:

• Musk’s increased involvement in right-wing politics is turning off some potential buyers (The Associated Press, The Guardian).
• Activists have started boycotting Tesla showrooms, leading to further negative sentiment (ABC News).
• Some Tesla owners are selling their cars in protest, impacting the brand’s resale value (CleanTechnica).

3️⃣ Tesla’s Competitive & Industry Challenges

• Falling EV Demand: The overall EV market is slowing, with hybrids gaining favor over full-electric vehicles (The Driven).
• Increased Competition: Toyota and other legacy automakers are now selling more EVs than Tesla in some regions (CarScoops).
• Tariffs & Trade Issues: New tariffs and pricing wars are squeezing Tesla’s margins (Investopedia).

4️⃣ Analyst Downgrades & Institutional Sell-Offs

• UBS recently slashed Tesla’s price target after lowering its delivery forecast (Investing.com India).
• Tesla’s CFO has sold another $1.7 million in Tesla stock, raising investor concerns (CFO Dive).
• Wedbush, which was previously bullish on Tesla, has removed it from its Best Ideas List, citing concerns over future growth (TipRanks).

5️⃣ Financial Pressure & Declining Profitability

• Declining Margins: Tesla’s once-lucrative profit margins are shrinking as it faces aggressive competition and higher production costs.
• Falling Carbon Credit Sales: Tesla’s reliance on selling carbon credits for revenue is now under threat as EV adoption grows among competitors (Futurism, Politico Europe).

🛠 What Should Investors Do?

✅ 1. Assess the Fundamentals

Despite the downturn, Tesla remains a major player in the EV space. Investors should analyze Tesla’s long-term growth strategy, upcoming product launches (e.g., Cybertruck), and advancements in AI and autonomy.

📊 2. Look at Technical Indicators

• Tesla’s stock has broken through key support levels, suggesting further downside risk.
• If the stock falls another 10-20%, it may present a buying opportunity for long-term investors.

🤔 3. Consider the Broader EV Market

• Tesla is still a leader in EV technology, but legacy automakers and Chinese competitors are rapidly catching up.
• Monitor government EV incentives and policies that may impact Tesla’s future revenue streams.

🏦 4. Stay Updated on Institutional Moves

• Institutional investors are reducing Tesla holdings. Watch for any large buying activity from hedge funds or major investors that could indicate a bottom.

📉 5. Be Prepared for More Volatility

Tesla’s stock is likely to remain volatile in the coming months. If you are a long-term investor, consider dollar-cost averaging instead of trying to time the market.

🔮 Final Thoughts: Is Tesla a Buy, Hold, or Sell?

Tesla’s recent stock crash is alarming, but it doesn’t necessarily signal the end of its dominance. However, investors should be cautious due to the combination of slowing EV demand, political risks, and financial pressures.

🏁 Investor Takeaways:

✅ Long-term investors should wait for stabilization before buying. ❌ Short-term traders should expect continued volatility and potential further declines. 💰 Institutional investors remain skeptical but may re-enter at lower levels.

Tesla’s future hinges on its ability to weather competition, maintain brand trust, and innovate in AI and autonomy. Investors should stay informed and make decisions based on data—not just hype or fear.

📢 What’s Your Move? Will you buy Tesla at these levels, or is it too risky? Let us know in the comments below!

📩 For personalized stock market guidance, reach out to Guruji Sunil Chaudhary, Top Digital Marketing Expert and Founder of JustBaazaar at sunil@justbaazaar.com. 🚀