Tesla shares crash 15%, now down over 50% since December
What's the story
Tesla's stock has taken a major hit, falling 15.4% to close at $222.15 on Monday in the US. This is the electric vehicle manufacturer's toughest trading day since September 2020.
The fall comes after a record-breaking seven consecutive weeks of losses for the company, its longest losing streak since listing on Nasdaq in 2010.
Since hitting a high of $479.86 on December 17, Tesla shares have lost more than 50% of their value, erasing about $800 billion in market cap.
Market impact
Wall Street sell-off and delivery forecast cuts
The recent sell-off on Wall Street has added to a broader downturn in US markets, with the Nasdaq index dropping nearly 4%, its steepest fall since 2022.
Tesla's stock decline was further compounded by UBS Group AG analyst Joseph Spak's decision to cut his delivery forecasts for the first quarter and full year.
Spak now predicts Tesla will deliver just 367,000 vehicles this quarter, a 16% cut from his previous estimate.
External pressures
Concerns over Trump's tariff plans and brand image
Uncertainty over President Donald Trump's tariff plans has also led to Tesla's stock decline.
Since Canada and Mexico are key markets for automotive suppliers, higher tariffs could affect production and increase costs.
Further, CEO Elon Musk's incendiary political rhetoric and his extensive work with the Trump administration have eroded the brand for Tesla in major EV markets.
Brand erosion
Vandalism and arson attempts on Tesla vehicles
Musk's controversial remarks have sparked protests at Tesla facilities nationwide, with activists and former fans voicing their anger.
Tesla vehicles and facilities have been vandalized and subjected to arson attempts.
Ben Kallo of Baird warned that incidents like these could affect demand for Tesla cars.
"When people's cars are in jeopardy of being keyed or set on fire out there," he said, "even people who support Musk or are indifferent might think twice about buying a Tesla."
Sales decline
Tesla sales drop in Europe and globally
Bank of America analysts reported that Tesla's new vehicle sales in Europe fell by approximately 50% in January year-on-year. The decline is partly attributed to the growing distaste for the brand.
Despite these challenges, Tesla's Model Y was still the best-selling battery electric vehicle globally in January, followed by China's Geely Geome, which surpassed the Tesla Model 3 sedan for the month.