- Tesla stock craters more than 15% on Monday, slipping back to October 2024 levels.
- It was the worst showing for Tesla stock since September 2020.
- UBS projected a delivery figure for Q1 more than 11% below consensus.
- Trump’s tariffs threaten to cut into Tesla’s gross margin.
Tesla (TSLA) stock experienced its largest sell-off on Monday in the last four-and-a-half years. Shares of the electric vehicle icon shed 15.5% to end the session at $222.05.
Tesla shares haven’t traded at this price level in six months, and the daily chart leaves in its wake a giant spike where TSLA hit an all-time high of $488.54 on December 18, 2024, following CEO Elon Musk’s ascent to the heights of political power as an advisor to US President Donald Trump.
TSLA daily stock chart
Tesla’s stock price cratered in unison with a widespread market faceplant. The S&P 500 dipped 2.7% on the day, while the NASDAQ gave back a momentous 4%.
President Trump’s seeming disinterest in downplaying early signs of an economic recession in a television interview broadcast on Sunday renewed investors’ fear of a broad market downturn.
Tesla stock news
The headlines for Tesla only made things worse on Monday. Poor initial sales numbers for Tesla in Europe and China led investment bank UBS to project just 367K in total global vehicle deliveries in the first quarter.
The consensus among Wall Street analysts had already been a conservative 415K, but UBS undercut that figure by 11.5%.
In the second half of 2024, Tesla delivered 462,890 vehicles in the third quarter and 495,570 in the fourth quarter. 367K deliveries would mean a 26% decrease on QoQ basis.
Many observers wonder whether Musk’s close relationship to Trump is hurting Tesla’s global brand. Sales in Germany for the month of February fell 76% YoY to just 1,429 units even as the nation’s auto market expanded over that period. Musk drew the ire of many Germans when he endorsed the far-right Alternative für Deutschland political party ahead of legislative elections in February.
If poor sales figures continue to dog Tesla, the firm’s 2 million consensus full-year delivery figure may come into doubt as well. A poor showing might also delay Tesla’s plans to construct another factory outside Houston, Texas, as well as its ill-timed entry into the Indian market.
Additionally, Trump’s tariffs on steel and aluminum imports could diminsh Tesla’s gross margin, just as the CEOs of other US auto companies claim. Further 25% tariffs, currently delayed, on Canada and Mexico that are scheduled to be reinstated in April could also upend the business. Both countries have said they would respond with retaliatory tariffs.
Trump is also promising to erect reciprocal tariffs on many more trading partners next month, which most economists predict will reduce economic growth. In an interview broadcast on Fox News on Sunday, Trump did not deny that his policies might reduce GDP growth in the short run. He countered with the idea that they would, however, bring “wealth to America” in the long run.
