2025 has been a challenging year for Tesla (TSLA) shareholders, with the stock trading down 25% year-to-date. From CEO Elon Musk’s controversial stint in President Donald Trump’s administration to collapsing sales in Europe and growing pressure from Chinese competitors like BYD (BYDDY), the headwinds have been relentless. Although Musk’s exit from his government role brought momentary relief, the stock hasn’t found its footing yet.  

This was especially evident during this past week, when tensions skyrocketed between President Trump and Musk and it was reported that sales of Tesla's electric vehicles (EVs) in China continued to fall in May and have now fallen for eight straight months. In May alone, deliveries of the Model 3 and Model Y, covering both domestic and export sales, slipped to 61,662 units, marking a 15% year-over-year decline. Even a modest 5.5% rise from April couldn’t mask the growing impact of fierce price wars in the world’s largest auto market.

Meanwhile, BYD, Tesla’s top rival, continued to build momentum with a 14.1% year-over-year jump in global passenger vehicle sales, outpacing Tesla even as its own growth cooled from April’s 19.4% surge. So, with Tesla under mounting pressure, is it time for investors to hit the brakes and sell?

About Tesla Stock

Once hailed as the crown jewel of the EV revolution, Tesla (TSLA) is now navigating a stormy 2025. After struggling with Elon Musk’s political drama, mounting competition, and falling sales, Tesla is back in the headlines. Just as investors began to relax after Musk stepped away from his role in the Trump administration, fresh drama quickly reignited concerns. 

This time, it was a very public clash between Musk and Trump over the proposed “The Big, Beautiful Bill,” a comprehensive piece of legislation currently being debated in the U.S. Congress. Musk heavily criticized this bill on X and Trump fired back by threatening to pull federal contracts and subsidies from both Tesla and SpaceX. The reaction was immediate. On June 5, Tesla shares tanked more than 14%, wiping out a staggering $150 billion in market value in just one day.

With Tesla’s market cap now hovering around $917 billion, shares of this EV maker are down roughly 30% in 2025, dramatically lagging behind the broader S&P 500 Index’s ($SPX) marginal gain during the same stretch. While volatility is nothing new for Tesla investors, its latest sharp drop is evidence of just how tightly the company’s fate is tied to Elon Musk’s every move.

Tesla’s Q1 Earnings Snapshot 

Tesla opened 2025 on a sour note, delivering a first-quarter earnings report on April 22 that fell flat across the board. Revenue dropped 9% year-over-year to $19.3 billion, missing the analysts’ target of $21.3 billion. But the real gut punch came from adjusted earnings, which plummeted 40% to just $0.27 per share, coming in nearly 35% below expectations.

Tesla’s automotive division sputtered in the first quarter, with revenue from its core business plunging 20%, dropping from $17.4 billion to about $14 billion. While the company blamed factory upgrades tied to the Model Y refresh, the damage ran deeper. Steep discounts and falling average selling prices put the brakes on profitability, weighing heavily on both revenue and margins.

On a brighter note, Tesla’s energy generation business surged 67% year-over-year to $2.7 billion, while its services segment posted a solid 15% gain to $2.6 billion. Still, faced with mounting headwinds across its core operations, Tesla struck a notably cautious tone. Rather than offering bold projections, the company chose to hit pause on big promises, stating it would “revisit our 2025 guidance in our Q2 update.”

What Do Analysts Expect for Tesla Stock?

Analysts, much like investors, are starting to tread carefully with TSLA stock. Take Goldman Sachs, for example. The leading investment bank recently trimmed its price target on Tesla from $295 to $285 while sticking with a “Neutral” rating. The move comes amid signs of slowing momentum, with weaker monthly sales data across major regions like the U.S., Europe, and China. While they're not pulling the plug on Tesla just yet, the tone is clearly more reserved as questions about near-term growth continue to mount.

Overall, Wall Street remains on edge, with the consensus firmly favoring a cautious “Hold” stance amid the ongoing uncertainty. Of the 41 analysts offering recommendations, 16 give it a solid “Strong Buy,” two suggest a “Moderate Buy,” 13 advocate “Hold,” and the remaining 10 give a “Strong Sell.” 

The average analyst price target of $292.17, which is actually slightly lower than where the stock is currently trading. However, the Street-high price target for TSLA is $500.

Key Takeaways

2025 has been a tumultuous year for Tesla, with the stock significantly underperforming the broader market amid relentless headwinds. Plummeting sales in key markets like China, intense competition from rivals such as BYD, and persistent political drama surrounding CEO Elon Musk – including a recent clash with President Donald Trump – have all contributed to a substantial year-to-date decline and a significant one-day market value loss. Coupled with a disappointing Q1 earnings report, characterized by declining automotive revenue and a cautious outlook, analysts largely maintain a "Hold" rating on TSLA. While the stock's fate remains heavily tied to Musk's actions, and despite some bullish long-term price targets, the near-term outlook for the EV giant is clouded by considerable uncertainty.