Market Analysis by Antonio Di Giacomo, Financial Markets Analyst for LATAM at XS
March 19, 2025 –
“Tesla has experienced a drop of more than 40% in its stock in 2025, driven by a combination of negative factors. The decline in sales expectations and the increasing politicization of its brand have pushed away investors and consumers, severely affecting the company’s stability. Elon Musk’s relationship with President Donald Trump has sparked controversy, causing a significant portion of Tesla’s customer base to seek alternatives in the electric vehicle market.
Vehicle deliveries in the first quarter of 2025 are expected to be at their lowest level in three years. The loss of customers has been a significant blow, but competition from Chinese manufacturers has also impacted Tesla. Companies like BYD have gained ground with more affordable and technologically advanced models, reducing Tesla’s market share in China and other key regions.
On the other hand, the company has expressed concern over trade policies that Trump may implement. Tesla has sent a letter to the Office of the U.S. Trade Representative warning about the effects of possible trade retaliation. The company argues that U.S. exporters, like itself, could be disproportionately affected by increased tariffs on foreign products and components.
The uncertainty generated by these factors has led several top executives and board members of Tesla to sell large amounts of stock. Since February, executive stock sales have exceeded $100 million, suggesting a lack of internal confidence in the company’s future. James Murdoch, a board member, sold $13 million worth of shares on March 10, the same day Tesla suffered its most significant single-day drop in five years.
Kimbal Musk, Elon Musk’s brother and board member, sold 75,000 shares valued at $27 million. Meanwhile, Robyn Denholm, the board chair, made two recent sales totaling over $75 million. Analysts have interpreted these transactions as warning signs about the company’s future performance, as Tesla’s market value has fallen nearly 50% from its peak in December 2024.
In conclusion, as Tesla faces these challenges, investors are cautiously watching the company’s performance in the coming months. Tesla’s future appears increasingly uncertain with rising competition, brand politicization, and economic uncertainty. Unless the company can reverse the trend with practical strategies, 2025 could become one of the most challenging years in its history.”
Analysis by Antonio Di Giacomo, Financial Markets Analyst for LATAM at XS