What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) fell 6.4% in the afternoon session as markets tumbled after holding steady the previous day, while concerns over the ongoing trade war continued to spread.
Investors briefly felt some optimism after the Trump administration said it would hold off on tariffs for automakers that met USMCA (United States-Mexico-Canada Agreement) rules. That helped the auto sector in particular, and there was perhaps some hope that the door was open to more broadly delaying tariffs. The sentiment seemed to be shifting in the other direction today, and the market is in 'risk-off' mode, with sectors such as tech seeing outsized declines. As of this writing, the S&P 500 had fallen 7% from where it closed on February 19th and the Nasdaq Composite dropped 10% over the same period. Separately, Baird analysts cut Tesla's price target to $370 from $440 and added the stock as a "Bearish Fresh Pick." The analysts noted, "Adding Bearish Fresh Pick given near-term headwinds. Intra-quarter sales data from TSLA's key regions lead us to believe there is risk to the consensus Q1 delivery estimate of 437.5K.".
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What The Market Is Telling Us
Tesla’s shares are extremely volatile and have had 116 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 7.7% on the news that data revealed the company had a rough February (2025) in China, with sales falling by almost half. According to the China Passenger Car Association, Tesla sold roughly 30,000 vehicles. That's a steep drop, raising questions about demand, competition, and how Tesla is navigating China's ever-evolving EV market.
Tesla is down 30.6% since the beginning of the year, and at $263.09 per share, it is trading 45.2% 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 $5,610.
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