Tesla shares nosedive as brand issues and tariffs bite
Tesla shares continue to decline, reaching their lowest level since the record rise in December. According to a Bloomberg report, the drop deepened following lower-than-expected delivery results for the first quarter and after analysts reduced their price forecasts, citing brand issues related to Trump's policies.
Tesla shares experienced declines of over 10%, falling to $214.80, a level that surprised analysts who had recently predicted increases. In a March interview, Commerce Secretary Howard Lutnick assured Fox News that the company's stock price "will never be this low again."
However, Bloomberg notes that these forecasts were incorrect as the declines continue. Daniel Ives, an analyst at Wedbush Securities, mentioned that Donald Trump's trade policy, which results in tariffs, impacts Tesla. "The tariffs in their current form will disrupt Tesla, the overall supply chain, and its global footprint which has been a clear advantage over the years versus rising competitors like BYD," he noted.
The company's first-quarter results fell short of expectations. "We may have underestimated the degree of consumer reaction," stated Ryan Brinkman from JPMorgan Chase & Co., who lowered his forecasts for Tesla's future.
The decreases in stock values also stem from an impending crisis in the electric car industry, following Tesla's announcement that vehicle deliveries in the first quarter did not meet analysts' expectations. Ives also pointed out that Trump's tariffs could be unfavorable for Tesla in China.
The backlash from Trump tariff policies in China and Musk’s association will be hard to understate, and this will further drive Chinese consumers to buy domestic such as BYD, Nio, Xpeng, and others, said the analyst.
Tesla's worst year
Tesla's deliveries in the first quarter of 2025 totaled 336,681 cars, significantly below analysts' forecasts and marking the worst performance since 2022. The company failed to meet market expectations, which anticipated 390,000 vehicles, and recorded a decline compared to the first quarter of 2024, when it delivered 387,000 vehicles.
Additionally, the company's result was lower than that of Chinese competitor BYD, which sold 416,388 electric cars during the same period and regained the leading position in the market.
