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Tesla Stock Plunge! What's the Issue?

Recently, Tesla's stock has plummeted, drawing significant attention from investors. As of March 10, 2025, Tesla's stock price dropped 15.4% to $222.15, marking the largest decline since 2020. This sharp drop also resulted in CEO Elon Musk's net worth decreasing by $29 billion in a single day.

Major Causes of the Stock Decline

1. Global Economic Uncertainty

Concerns over a potential U.S. economic recession and trade war uncertainties have dampened investor sentiment. In particular, worries about former President Donald Trump's tariff policies have negatively impacted the overall market.

2. Declining EV Sales in China

Tesla's electric vehicle sales in China have significantly declined amid intensifying market competition. In February 2025, Tesla's China-made EV sales fell 49.2% year-over-year to 30,688 units, the lowest level since August 2022.

3. Elon Musk's Political Stance

Elon Musk publicly endorsed Donald Trump in the 2024 U.S. presidential election and donated $270 million to his campaign. This move alienated Tesla's environmentally conscious customer base, leading to boycotts and even protests in certain areas.

Investor Reactions and Future Outlook

Some investors are raising concerns about Elon Musk's leadership. Critics argue that Musk has been distracted by his political engagements and other ventures (such as SpaceX and xAI), neglecting Tesla's management. There is growing discussion among shareholders about the possibility of appointing a new CEO.

Experts suggest that Tesla's future valuation will depend on its ability to deliver on autonomous driving and robotics technology. The recent stock decline reflects the gap between expectations for future innovations and Tesla's current reality.

Tesla continues to hold a higher valuation than traditional automakers, but the recent downturn has prompted investors to reassess the risks. The focus now shifts to how Tesla will navigate and overcome these challenges.

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