Few people will be happier to see February end than Tesla (NASDAQ:TSLA) shareholders. The stock had the second-worst performance in its history. And the stock is down 29.5% in 2025. Whether you classify Tesla among the automotive stocks or among technology stocks, it’s been a tough stock to hold.
However, investors who see the glass as half full could point out that TSLA stock is still up 40% in the last 12 months and is trading 19% below the consensus price target from the Tesla analyst forecasts on MarketBeat.
That’s not to say that analysts aren’t wavering on their bullish outlook. On March 4, Bank of America lowered its price target from $490 to $380. That’s still 16% above the consensus price, but it does signal that institutional investors are taking a more cautious approach to the company’s stock. It’s also a reason why many investors may want to wait for a more defined entry point before buying this dip.
A Reality Check on the Trump Trade
Tesla stock was one of the biggest winners of the “Trump trade” after the 2024 election. Many investors believed that Tesla would be one of the largest beneficiaries of Elon Musk’s close association with President Donald Trump.
However, that’s turned into a bittersweet story. People of all political persuasions buy Teslas, and many are not happy with Musk’s rising political profile.
In addition to being the face of the Department of Government Efficiency (DOGE) committee, Musk has been weighing in on a number of issues that are making Tesla shareholders uncomfortable and wondering if between his various business interests and his prominent role in the Trump administration leaves little time to mind the store at Tesla.
Another consideration for Tesla shareholders is the impact that tariffs will have on Tesla sales, particularly in China, where the company was recently overtaken by BYD. And there’s growing concern that BYD will begin to capture market share from Tesla throughout Europe and the rest of Asia.
Recent European registration data (that continent’s proxy for sales) shows Tesla registrations down 45% year-over-year (YoY) in January, while overall EV registrations were up 37%.
Not Everyone is Bearish on Tesla
On March 3, Morgan Stanley reiterated its price target of $430 on TSLA stock. Analyst Adam Jonas listed it as one of his top picks. The reason for his bullish outlook was his belief in the “more than a car company” narrative that underlies the company’s stock. The feeling is that the company’s advancements in areas such as energy storage, AI and robotics will offset any trouble the EV side of the business faces.
And it’s important to note that BYD still believes that the two companies will need to work together to grow the EV market. Yunfei Li, general manager of branding and public relations at BYD, remarked, “I think this market is very large. It's not that we must surpass them, or they must surpass us. Instead, BYD and Tesla together, or more new energy vehicle brands together, we need to think about how to increase the new energy vehicle 'cake.”
Investors Have Seen This Price Movement Before
Despite the drop in TSLA stock, it still trades at around 111x forward earnings. Traditional measures suggest that it is overvalued. And even though Tesla stock has been known to have some lofty P/E values in the past, it’s still above its historical average.
However, the company’s shareholders don’t scare easily. From November 2021 to January 2023, TSLA stock dropped approximately 72%. That’s more than double the percentage drop investors are facing right now. In fact, TSLA stock would have to reach $123 to hit that percentage drop.
In early morning trading on March 4, TSLA stock was trading right at its 200-day simple moving average. This could be a tell-tale moment for investors. If the stock holds this level, it could signal the start of a relief rally. But if the stock was to break that level, it could start a greater tumble to around $214, that’s about 32% below the current price.