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Tesla stock fell more than 15% on Monday, reaching its lowest level since before the presidential election and dropping more than 50% from its record closing high of $479 on December 17. This marked Tesla’s worst trading day since September 2020.
Analysts at UBS lowered their price target on Tesla to $225 from $259, citing weaker-than-expected delivery forecasts for the first quarter due to declining demand for the Model 3 and Model Y. The firm maintained a Sell rating on the stock.
UBS now estimates Tesla will deliver 367,000 vehicles in the first quarter, down from the previous estimate of 437,000 it had initially used as a placeholder following Tesla’s fourth-quarter earnings report in late January. This forecast represents a 5% decline in deliveries compared to the previous year and a 26% drop from the prior quarter. Analysts pointed to data showing short delivery times for the Model 3 and Model Y—typically within two weeks—in key markets, signaling weaker demand.
Tesla’s stock was further pressured by news that its shipments in China dropped 49% in February compared to the previous year, marking the lowest level in nearly three years.
With Monday’s decline, Tesla has erased all post-election gains, continuing the broader selloff that has defined recent market trends. The stock has now lost more than 20% since the beginning of March.
Despite the sharp decline, some of Tesla’s most vocal supporters have defended the stock. Last Thursday, Wedbush analyst Dan Ives reaffirmed confidence in Tesla, adding it to the firm’s “Best Ideas List” and maintaining an Outperform rating with a $550 price target. He acknowledged that Tesla has faced similar downturns in the past, emphasizing that negative sentiment has overshadowed the company’s long-term potential as a disruptive force in the global tech industry.
Morgan Stanley analyst Adam Jonas also reiterated his bullish stance, forecasting that Tesla shares could rise to $430 as the company expands into artificial intelligence and robotics. He reinstated Tesla as a top pick in the auto sector, emphasizing that declining auto deliveries are a sign of Tesla’s transition from a traditional automaker to a diversified technology company. While he projected that Tesla’s 2025 deliveries could decline year over year, he suggested this could create an appealing entry point for investors.
