Tesla share price crashes 15%, tumbles most since 2020; here’s why Tesla stock is falling

Tesla's sell-off on Wall Street escalated on Monday, with the electric vehicle maker's shares tumbling 15%, marking their worst trading day since September 2020.

On Friday, Tesla concluded its seventh consecutive week of losses, the longest losing streak since its Nasdaq debut in 2010. The stock has declined every week since CEO Elon Musk traveled to Washington, D.C., to assume a significant role in the second Trump White House.

Since reaching a high of $479.86 on December 17, Tesla shares have plunged over 50%, erasing more than $800 billion in market capitalization. Monday ranked as the stock’s seventh worst trading day in history.

Tesla's decline contributed to a broader downturn in U.S. markets, with the Nasdaq dropping nearly 4%, marking its sharpest fall since 2022.

Why Tesla stock is falling?

The stock plunged on Monday after UBS Group AG analyst Joseph Spak reduced his delivery forecasts for both the first quarter and the full year. Similarly, Ben Kallo of Robert W. Baird & Co. lowered his Tesla delivery estimates on March 6.

Spak now predicts Tesla will deliver just 367,000 vehicles this quarter, a 16% cut from his previous estimate. He also no longer expects the company to surpass last year’s sales in 2025, instead forecasting an approximate 5% annual decline.

Beyond the challenges of transitioning its key model to a new design, backlash against CEO Elon Musk is affecting Tesla’s reputation in major EV markets early this year.

In Germany, for example, vehicle registrations dropped by 70% in the first two months, coinciding with Musk’s involvement in the country’s tightly contested federal election.

Alongside Tesla’s challenges, Musk’s social network X faced multiple outages on Monday, while his aerospace and defense company, SpaceX, is investigating back-to-back explosions that occurred during test flights of its massive Starship rocket.

Tesla's stock decline on Monday was also linked to uncertainty over President Donald Trump's tariff plans. Since Canada and Mexico are crucial markets for automotive suppliers, higher tariffs and the risk of a trade war could impact production and drive up costs.

Bank of America analysts reported on Monday that Tesla's new vehicle sales in Europe dropped by approximately 50% in January compared to the previous year, partly due to declining brand appeal. They also highlighted that some potential buyers are holding off purchases in anticipation of the updated Model Y.

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