Tesla’s stock is down over 30% so far in 2025, especially after coming off a rough February. March could be a repeat performance, given the way it’s started, opening opportunities for bearish traders. A CNBC report noted that Tesla witnessed its largest drop since December 2022, when the stock price fell 22%.
As the report also noted, this hasn’t affected founder Elon Musk’s confidence in the stock. Apparently, Musk said in a social media post that the electric automaker could see a “1000% gain for Tesla in 5 years” with “outstanding execution.” Furthermore, Tesla also got a vote of confidence from Morgan Stanley, who named the company its top pick for U.S. autos.
Despite the enthusiasm, the numbers tell a more dreary story. The company’s fourth-quarter earnings report saw its automotive revenue drop 8% from the previous year. Additionally, Tesla’s operating income dropped 24%, citing reduced selling prices across its major models.
Another headwind is tariffs, particularly on Canada and Mexico. Tesla’s automobiles rely on these countries as suppliers for parts and materials, so that will definitely take a toll on the bottom line, unless Tesla can quickly source them from other countries.
Musk Causing Price Declines?
Outside of macro and microeconomic factors, market analysts also cite Musk’s activities outside of Tesla as a potential reason for the stock’s decline. Is Tesla’s founder taking on too much, which could negatively affect Tesla?
“But the recent stock price decline is not just about what’s been happening at Tesla,” the CNBC report said. “Musk’s politics, work and antics outside of Tesla are apparently taking a toll.”
In addition to running Tesla, Musk is still running SpaceX, social media messaging company X, and startup xAI. If that’s not enough, his work with the newly formed Department of Government Efficiency (DOGE) in U.S. president Donald Trump’s administration could serve as a distraction.
If the downtrend persists, then traders may want to continue piling on the bearishness with the Direxion Daily TSLA Bear 1X Shares (TSLS ). Having an inverse position allows traders to also profit from price dips and downturns for added market flexibility.
If the stock price recovers, then they can alternatively hop on the Direxion Daily TSLA Bull 2X Shares (TSLL ). A more broad play to work in tandem with TSLL is the Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares (EVAV ). The fund seeks to achieve 200% of the daily performance of the Indxx US Electric and Autonomous Vehicles Index.
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