Tesla’s Stock Volatility: A Roller Coaster Ride in 2025
Tesla Inc. (NASDAQ: TSLA), one of the most widely followed and traded EV stocks, is once again in the spotlight due to its turbulent performance in 2025. Despite an explosive rally in late 2024, where shares nearly doubled in value amid optimism over Donald Trump’s pro-business presidency, Tesla’s momentum has reversed.
As of March 19, 2025, Tesla stock has plunged by 51% from its December peak, sending shockwaves across Wall Street. The sharp decline is fueled by weaker-than-expected financials, mounting competition, and growing concerns over Elon Musk’s leadership.
Now, Dan Ives, a long-time Tesla bull and managing director at Wedbush Securities, is raising alarms, urging Musk and Tesla’s board to take immediate action to prevent a deeper crisis.
Tesla’s Slumping Stock Performance: What Went Wrong?
After reaching a record high in December 2024, Tesla shares have been on a downward spiral. Key factors behind the slump include:
✅ 1. Disappointing Q4 Earnings:
- Tesla reported Q4 2024 revenue of $25.7 billion, missing analyst expectations.
- Year-over-year revenue growth slowed to just 2%, a stark contrast to previous double-digit expansion.
- Vehicle deliveries fell by 1% in 2024—the company’s first-ever annual decline.
- Operating margin shrank to 7.2%, down from 16.8% in 2022, signaling deteriorating profitability.
✅ 2. Weak Demand Despite Price Cuts:
Despite aggressive price reductions throughout 2024, Tesla failed to reignite demand.
- The company slashed Model Y and Model 3 prices by as much as 20% in several markets.
- However, rivals such as BYD, Rivian, and legacy automakers introduced more affordable EV models, eating into Tesla’s market share.
✅ 3. Increasing Competition:
Tesla is facing intense competition from both emerging EV startups and established automakers.
- BYD surpassed Tesla as the top EV seller in Q4 2024, threatening Tesla’s global dominance.
- Rivian and Lucid Motors continue to gain ground in the luxury EV market.
- Traditional giants like Ford, GM, and Volkswagen are rapidly expanding their EV lineups.
✅ 4. Musk’s Leadership Concerns:
Elon Musk’s unpredictable behavior and controversial decisions have raised concerns.
- His increased focus on X (formerly Twitter) and other ventures has led to criticism of Tesla’s leadership stability.
- Musk’s recent remarks about political issues have alienated some customers and investors.
Dan Ives: A Bull Turned Skeptic?
Dan Ives, one of Tesla’s most vocal Wall Street supporters, has consistently praised the company’s long-term growth potential. Even during previous stock dips, he maintained a bullish outlook.
However, Ives recently published a critical report on March 19, highlighting serious concerns about Tesla’s current trajectory. In the note, Ives outlined a two-step action plan that Musk must follow to prevent further stock erosion and restore market confidence.
Dan Ives’ Two-Step Plan to Save Tesla
1️⃣ Revamp the Public Perception of Tesla:
- Ives argues that Tesla is facing a public perception crisis.
- He believes Musk and the Tesla board must proactively address investor and consumer concerns.
- Simply relying on high-profile endorsements—such as Donald Trump buying a Tesla EV—is not a sustainable solution.
2️⃣ Stronger Leadership and Communication:
- Ives called on Musk to take immediate steps to provide clear guidance on Tesla’s growth strategy.
- He urged the board to assert more oversight over Musk’s activities and limit distractions from his non-Tesla ventures.
- “As someone who is a core bull and believer in Tesla’s long-term growth story, I loudly urge Musk and the board to step up, stop being silent, and help resolve this crisis,” Ives wrote.
The Broader Impact on Tesla’s Business
Tesla’s recent struggles are not only impacting its stock price but also raising questions about its future competitiveness.
🚫 1. Slowing EV Growth and Market Share Loss:
- Tesla’s global EV market share dropped from 17% in 2023 to 14.5% in 2024.
- BYD, backed by the Chinese government, is offering more affordable models, pressuring Tesla’s pricing power.
🔋 2. Profitability Concerns:
- With shrinking margins, Tesla’s profit outlook is weakening.
- The company’s higher cost of production makes it less competitive against cheaper Chinese EVs.
🚗 3. Delays in Autonomous Driving and Robotaxis:
- While Musk continues to promote Tesla’s autonomous driving ambitions, execution has been slow.
- The much-anticipated robotaxi service faces regulatory hurdles and technological challenges, delaying its rollout.
Is Tesla Stock a Buy, Sell, or Hold?
Given Tesla’s current challenges and volatility, investors are debating whether to buy, sell, or hold the stock.
✅ Buy Tesla Stock If:
- You believe in Tesla’s long-term growth potential driven by autonomous driving and emerging technologies.
- You anticipate a market recovery and view the current dip as a buying opportunity.
- You are prepared to hold the stock through short-term volatility.
❌ Sell Tesla Stock If:
- You are concerned about falling profitability and shrinking market share.
- You believe Tesla’s valuation is still too high relative to its financial performance.
- You have doubts about Musk’s leadership and the company’s strategic direction.
⏸️ Hold Tesla Stock If:
- You already own Tesla shares and are willing to wait for a potential rebound.
- You have a long-term investment horizon and believe in the company’s innovation potential.
- You are cautious but not ready to exit your position.
Wall Street Analyst Sentiment on Tesla
Market sentiment on Tesla is mixed:
- Bullish Analysts: Expect Tesla’s lower-cost EV models and autonomous driving initiatives to drive future growth.
- Bearish Analysts: Highlight shrinking margins, competition, and Musk’s leadership issues as major risks.
- Price Targets: Tesla’s 12-month price targets range from $150 to $275, reflecting the divide in sentiment.
Key Takeaway: Tesla’s Future Hinges on Leadership and Execution
Tesla’s stock volatility and weakening financials have raised concerns among investors, even prompting long-time bulls like Dan Ives to call for urgent changes.
While Tesla’s long-term growth potential remains intact, short-term risks such as shrinking margins, intensifying competition, and Musk’s leadership distractions could hinder its recovery.
For now, investors may consider holding Tesla stock while closely monitoring leadership moves and upcoming earnings reports.
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