What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ:TSLA) fell 3.3% in the afternoon session after reports revealed that the company's sales in China fell 11.5% year on year in January 2025, despite incentivizing consumers to boost demand. Data from the China Passenger Car Association revealed that deliveries of Tesla's Model 3 and Model Y vehicles in China fell 32.6% from December 2024. The data further revealed that Chinese competitor BYD recorded a 47% sales growth during the period, stoking fears that Tesla is losing ground in the world's biggest auto market.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Tesla? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Tesla’s shares are extremely volatile and have had 112 moves greater than 2.5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 3.6% after Bloomberg reported that the company's sales fell almost 60% in Germany, compounding its woes in Europe, days after reports revealed similar weaknesses in Sweden and Norway.
Data from the German Federal Motor Transport Authority revealed Tesla registered only 1,277 new cars in January 2025, hitting their lowest level since mid-2021, signaling weakening demand. Furthermore, the data indicated a similar decline in France and the UK.
On top of that, JP Morgan flagged Tesla as one of the stocks "most at risk" from trade tensions and tariff disputes. Analyst Lakos-Bujas added, "...we expect sudden bouts of volatility followed by recovery ... with high stock dispersion to be an ongoing feature for markets in 2025."
Tesla is down 4.8% since the beginning of the year, and at $361.05 per share, it is trading 24.8% below its 52-week high of $479.86 from December 2024. Investors who bought $1,000 worth of Tesla’s shares 5 years ago would now be looking at an investment worth $7,239.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free and will only take you a second.
