Tesla Stock Plummets: Worst Quarter Since 2022
Tesla Stock Suffers Worst Quarter Since 2022, Plunging 36%
Tesla's stock experienced its most significant quarterly decline since the final quarter of 2022, plummeting 36% in the first three months of 2025. This marks the third-steepest drop in the company's 15-year history as a publicly traded entity. The drop wiped out over $460 billion in market capitalization. The previous worst period was late 2022, when the stock fell 54%, coinciding with CEO Elon Musk's sale of over $22 billion in Tesla shares to fund his acquisition of X (formerly Twitter).
The first-quarter downturn coincides with Musk's leadership of the Department of Government Efficiency (DOGE), a White House initiative focused on reducing federal spending. While DOGE claims to have achieved $140 billion in spending reductions by March 24th, this figure is significantly less than Tesla's market cap loss during the same period. Musk’s role in DOGE has been met with protests, boycotts, and even violent attacks on Tesla stores and vehicles globally, contributing to the negative sentiment surrounding the company. Furthermore, President Trump's automotive tariffs, impacting key suppliers in Mexico and China, are also causing concern for Tesla. These tariff fears contributed to a broader tech selloff, with the Nasdaq experiencing its largest quarterly drop since 2022, falling 10%.
Tesla also faces challenges stemming from declining new vehicle sales. Competition in the electric vehicle market is intensifying, and the company is under pressure to deliver on Musk's promises for robotaxis. While Musk has announced plans to launch a driverless ride-hailing service in Austin, Texas, in June, analysts express skepticism about the feasibility of meeting this deadline. Musk previously stated that existing Tesla cars could be upgraded via software for robotaxi functionality, but later indicated that a forthcoming Full Self-Driving software version requires a hardware upgrade as well.
Despite the significant first-quarter drop, which follows a 29% decline in the first quarter of 2024 attributed to declining auto sales and increased competition, Musk remains optimistic. He suggests the current stock price may present a buying opportunity, citing the stock's previous recovery from similar downturns (a 63% rally following the 2024 Q1 drop). While eleven of nineteen analysts tracked by Visible Alpha maintain a "buy" rating on Tesla stock, with an average price target of $349 (compared to Monday's closing price of $259.16), the company's future performance remains uncertain.
Tesla's stock experienced its most significant quarterly decline since the final quarter of 2022, plummeting 36% in the first three months of 2025. This marks the third-steepest drop in the company's 15-year history as a publicly traded entity. The drop wiped out over $460 billion in market capitalization. The previous worst period was late 2022, when the stock fell 54%, coinciding with CEO Elon Musk's sale of over $22 billion in Tesla shares to fund his acquisition of X (formerly Twitter).
The first-quarter downturn coincides with Musk's leadership of the Department of Government Efficiency (DOGE), a White House initiative focused on reducing federal spending. While DOGE claims to have achieved $140 billion in spending reductions by March 24th, this figure is significantly less than Tesla's market cap loss during the same period. Musk’s role in DOGE has been met with protests, boycotts, and even violent attacks on Tesla stores and vehicles globally, contributing to the negative sentiment surrounding the company. Furthermore, President Trump's automotive tariffs, impacting key suppliers in Mexico and China, are also causing concern for Tesla. These tariff fears contributed to a broader tech selloff, with the Nasdaq experiencing its largest quarterly drop since 2022, falling 10%.
Tesla also faces challenges stemming from declining new vehicle sales. Competition in the electric vehicle market is intensifying, and the company is under pressure to deliver on Musk's promises for robotaxis. While Musk has announced plans to launch a driverless ride-hailing service in Austin, Texas, in June, analysts express skepticism about the feasibility of meeting this deadline. Musk previously stated that existing Tesla cars could be upgraded via software for robotaxi functionality, but later indicated that a forthcoming Full Self-Driving software version requires a hardware upgrade as well.
Despite the significant first-quarter drop, which follows a 29% decline in the first quarter of 2024 attributed to declining auto sales and increased competition, Musk remains optimistic. He suggests the current stock price may present a buying opportunity, citing the stock's previous recovery from similar downturns (a 63% rally following the 2024 Q1 drop). While eleven of nineteen analysts tracked by Visible Alpha maintain a "buy" rating on Tesla stock, with an average price target of $349 (compared to Monday's closing price of $259.16), the company's future performance remains uncertain.
