TLDR:
- Tesla stock dropped 7.3% on Thursday after surging 23% on Wednesday
- TSLA is down 38% year-to-date, the worst performer among tech megacaps
- President Trump’s tariff policies causing market volatility, with China tariffs now at 145%
- Tesla’s Q1 EV sales declined 8.6% while the overall EV market grew 10.6%
- Elon Musk engaged in public dispute with Trump advisor Peter Navarro over Tesla’s manufacturing
Tesla stock closed at $252.40 on Thursday, retreating 7.3% after enjoying its biggest single-day rally since 2013 just a day earlier. The electric vehicle maker’s shares have been on a rollercoaster ride, with price swings ranging from $214.25 to $274.69 in a single week.
The wild price movement represents nearly $200 billion in market value fluctuation. Even after Thursday’s decline, Tesla stock was still up 5% for the week, following a 9% drop the previous week.
President Donald Trump sent stocks climbing Wednesday when he announced a 90-day pause on most new tariffs to allow for negotiations. However, the White House later clarified that China’s tariff rate now stood at 145%.
In response, Beijing announced reciprocal 84% tariffs on U.S. goods, effective April 10. The European Union also approved reciprocal tariffs on U.S. imports.
Tariff Concerns Weighing on Tesla
These tariff developments have major implications for Tesla, which sources many parts and materials from suppliers in China, Mexico, and other countries. The uncertainty and threat of new tariffs have raised concerns about Tesla’s profit margins.
Several major investment banks, including UBS, Goldman Sachs, and Mizuho, cut their price targets on Tesla stock. UBS, which has a sell rating and a $190 price target, specifically cited “demand concerns” and margin impacts from Trump’s auto tariffs.
The stock volatility comes amid a public spat between Tesla CEO Elon Musk and Peter Navarro, one of President Trump’s top trade advisors. Musk called Navarro a “moron” and “dumber than a sack of bricks” in social media posts after Navarro criticized Tesla’s manufacturing capabilities.
Despite this conflict, Musk has shown support for the administration’s tough stance on China. He shared a clip on X of U.S. Treasury Secretary Scott Bessent discussing China’s “incredible imbalanced economy” and export of “subsidized goods to the rest of the world.”
Tesla’s Market Share Challenges
Tesla’s market position is also under pressure. According to Cox Automotive’s first-quarter EV report, Americans bought approximately 294,000 electric vehicles in Q1, representing a 10.6% increase year-over-year.
However, Tesla’s sales dropped to about 128,000 units, an 8.6% decline. This resulted in Tesla’s market share falling by nine percentage points.
The company has experienced brand deterioration and declining deliveries across multiple markets. In Europe, Tesla sales declined in the first quarter, according to data from the European Automobile Manufacturers’ Association (ACEA).
Competition has ramped up substantially in both Europe and Asia, with many new EV models entering the market. Tesla must now deal with this increased competition while also facing higher costs imposed by tariffs.
Technical Support Levels
Market technicians suggest watching key support levels for Tesla stock. Frank Cappelleri, founder of CappThesis, believes it’s important for shares to stay above $210, noting that investors have historically stepped in to buy dips between $210 and $220.
Fairlead Strategies analyst Will Tamplin agrees, putting support closer to $220. A drop below these levels could signal additional pain ahead for Tesla investors.
Coming into Friday’s trading session, Tesla stock was down about 38% year-to-date, making it by far the worst performer among tech’s megacap companies. The stock has been highly volatile, rising or falling by at least 5% on 19 different occasions this year.
Premarket trading on Friday showed Tesla shares falling another 1.9% to $247.82, while S&P 500 futures were rising 0.3% and Dow Jones Industrial Average futures were falling 0.3%. This continued volatility came as China announced 125% tariffs on U.S. goods.
For investors watching Tesla stock, market technician Cappelleri offers a reminder that stock market volatility cuts both ways. When a stock surges 23% in one day, as Tesla did on Wednesday, a 7% drop the following day isn’t particularly surprising.
Thursday’s selloff provided some relief to Tesla short sellers, who suffered losses during Wednesday’s rally. According to S3 Partners, Tesla short interest stood at around 80.5 million shares as of Thursday, with short positions valued at approximately $17.9 billion.
