Tesla's stock plummets 15%, its steepest drop since 2020: Here’s why Tesla shares are falling

Tesla's stock plummets 15%, its steepest drop since 2020: Here’s why Tesla shares are falling

Tesla Inc.'s stock saw its largest decline in over four years, continuing its downward trend in 2025.

On March 11, 2025, Tesla shares dropped by 15%, marking the steepest fall since September 2020. This came after Tesla completed its seventh consecutive week of losses, the longest losing streak since its Nasdaq debut in 2010. The stock has faced losses every week since CEO Elon Musk’s visit to Washington, D.C., to take on a prominent role in the second Trump administration.

Since reaching a peak of $479.86 on December 17, Tesla’s stock has dropped more than 50%, wiping out over $800 billion in market value. Monday’s plunge ranked as the seventh worst trading day in Tesla’s history.

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

Why is Tesla’s stock falling?

The decline followed a revision of delivery forecasts by UBS Group AG analyst Joseph Spak, who cut his first-quarter and full-year delivery estimates. Similarly, Ben Kallo from Robert W. Baird & Co. reduced his Tesla delivery predictions on March 6.

Spak now expects Tesla to deliver just 367,000 vehicles this quarter, a 16% decrease from his previous estimate. He also revised his forecast for Tesla’s 2025 sales, predicting a 5% annual decline, instead of growth over the previous year.

In addition to challenges in transitioning its key model to a new design, Tesla’s reputation in major electric vehicle markets is being affected by backlash against CEO Elon Musk early this year. In Germany, for instance, vehicle registrations for Tesla dropped by 70% in the first two months of the year, coinciding with Musk’s involvement in the country's closely contested federal election.

Musk’s other ventures also faced issues. His social network X experienced multiple outages on Monday, while SpaceX is investigating explosions during test flights of its massive Starship rocket.

Tesla’s stock decline was also influenced by growing uncertainty around President Donald Trump’s tariff plans. Increased tariffs, especially in key markets like Canada and Mexico, could raise production costs and impact Tesla’s supply chain.

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. The decline was attributed partly to waning brand appeal and the fact that many potential buyers are delaying purchases in anticipation of the updated Model Y.

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