Despite recent struggles, Tesla remains a leader in the electric vehicle market, though analysts caution that ongoing losses and regulatory challenges could hinder future growth.

Tesla's Shanghai factory, crucial for production, may encounter difficulties due to anti-American sentiment and Musk's political affiliations, potentially affecting sales in China.

Tesla's stock has seen a dramatic decline, falling nearly 50% to around $250, down approximately 48% from its peak in December 2024.

In the first quarter of 2025, Tesla reported a 13% year-over-year decrease in vehicle deliveries, totaling 336,681, further suggesting declining demand.

The escalating U.S.-China trade conflict, with tariffs on Chinese imports raised to 125%, poses significant risks to Tesla's operations, particularly in China, which accounts for 21% of its revenue.

The company is grappling with slowing growth, as automotive revenue declined by 6% in 2024, and profitability has been impacted by shrinking gross and operating margins.

Higher interest rates and economic uncertainty have prompted Tesla to engage in price wars to sustain demand, further straining its financial health.

Despite this drop, Tesla's valuation metrics indicate it remains significantly overvalued compared to the S&P 500, with a price-to-sales ratio of 8.9 versus 3.2.

In Europe, Tesla's market share has plummeted from 17.9% to 9.3% in Q1 2025, influenced by falling sales and CEO Elon Musk's controversial political endorsements.

Investors are increasingly cautious as Tesla faces multiple challenges, including declining global sales and the impact of Musk's public persona on consumer sentiment.

Looking ahead, Tesla plans to launch a robotaxi service in Texas by June 2025, aiming to revolutionize car ownership and generate high-margin revenue.

Analysts have mixed outlooks for Tesla's stock, with predictions varying widely among bullish, bearish, and base cases, reflecting the uncertainty surrounding the company's future.