Tesla (TSLA) shares continued their downward trend early Tuesday following a steep decline on Monday. The electric vehicle (EV) giant is facing mounting challenges, including lower-than-expected delivery estimates and increased competition, raising concerns among investors and analysts.
Tesla Shares Slide Amid Market Uncertainty
Tesla stock dipped 0.2% in premarket trading to $237.59, following a 4.8% drop on Monday. In comparison, the S&P 500 and Dow Jones Industrial Average futures both saw minor declines of about 0.1%.
The latest decline follows Mizuho analyst Vijay Rakesh’s decision to cut his full-year Tesla delivery estimate from 2.3 million to 1.8 million vehicles. Tesla delivered approximately 1.8 million cars in 2024, signaling stagnant growth. “We believe Tesla’s sales woes are the result of a deterioration in geopolitics, brand perception (U.S./EU), share loss due to stronger competition (China), and softer-than-expected demand for the Model Y refresh,” Rakesh stated in his report.
Despite these concerns, Rakesh maintained his Buy rating on Tesla stock but revised his price target downward from $515 to $430.
Declining Delivery Expectations Raise Alarms
Overall, Wall Street now expects Tesla to deliver around 2 million vehicles in 2025, a downgrade from previous estimates of 2.1 million. However, more recent projections suggest deliveries could be as low as 1.8 million.
A similar trend is evident for the first quarter of 2025. Initial analyst predictions placed Tesla’s Q1 deliveries at around 470,000 vehicles. That estimate has since fallen to approximately 360,000, down from the 420,000 expected earlier. Tesla delivered about 387,000 vehicles in Q1 2024, raising concerns that the company may struggle to achieve year-over-year growth following a record-breaking Q4 2024 when it sold nearly 500,000 cars.
Investor Sentiment Continues to Decline
The drop in delivery estimates has significantly impacted investor sentiment. As of Tuesday, Tesla stock was down 41% year-to-date and 5% since the U.S. presidential election on November 5. Tesla shares had surged following former President Donald Trump’s victory, reaching a peak of $488.54 on December 18.
Many investors had speculated that a second Trump administration might implement regulations favoring Tesla, particularly in the self-driving car sector. Tesla has ambitious plans to launch a robotaxi service in 2025, and relaxed regulations could potentially accelerate its rollout. However, disappointing sales figures and CEO Elon Musk’s increasing political involvement have some investors worried about the impact on Tesla’s brand perception and consumer demand.
Tesla Faces Record Losing Streak
Tesla shares are now at risk of marking their ninth consecutive weekly decline. The stock has already experienced an eight-week losing streak—the longest in Tesla’s history. Investors are closely monitoring whether the downward trend will continue or if the company can stabilize amid increasing competition and shifting market dynamics.
With concerns growing over global demand, geopolitical tensions, and a crowded EV market, Tesla’s future performance remains uncertain. Analysts and shareholders alike will be watching closely for upcoming financial reports and strategic moves from the automaker.
