Tesla (NASDAQ: TSLA) shares have always been volatile, but investors who couldn’t stomach the swings have generally lost out. The dips have been short-lived, but the peaks spectacular.
Right now, the shares are in a trough. So, is this one of those golden buying opportunities that Elon Musk’s electric vehicle (EV) company occasionally throws up? Or is it the end of the road for what’s arguably the most compelling stock of the last decade?
Has Elon Musk backfired?
The Tesla share price has had a brutal 2025, crashing more than 40% year-to-date. That’s a much sharper drop than the S&P 500, down just 4.33%.
The stock is back to pre-‘Trump bump’ levels, as investors fret over falling sales, a lack of new models, growing competition and Musk’s latest controversies.
Tesla has always been an unconventional stock. Despite selling far fewer cars than legacy carmakers, on 27 December Newsweek calculated its shares were more valuable than the 35 next biggest carmaking peers.
At the time, Tesla’s market cap stood at $1.46trn. Today, it’s down to $696bn.
That was partly thanks to the cult of Musk and largely the belief that Tesla is more than just a car company. It’s a technology powerhouse that will dominate the future of transport.
But reality is hovering. Tesla’s latest earnings report disappointed investors, with profits missing expectations and vehicle deliveries declining.
The company has had to slash prices to stay competitive, squeezing margins further. And while Tesla still dominates the US electric market, it’s facing increasingly tough competition from traditional carmakers and cut-price Chinese rivals.
Then there’s Musk himself. His close ties to Donald Trump may have alienated a chunk of Tesla’s possibly more liberal customer base. That could especially be the case in Europe as sales in France of Germany have plummeted around 60%.
Is this a brilliant buying opportunity?
Investors are also asking whether Musk is spreading himself too thinly, running social media platform X, developing AI and shooting for the stars with SpaceX. There’s also the risk that Musk and Trump could fall out at some point.
One thing hasn’t changed. This remains the ultimate high-risk, high-reward stock. The brand still has massive global recognition, its technology remains ahead of many rivals, and the EV market should only grow in the long run.
If an investor had taken the plunge and put £10,000 into Tesla when the market opened yesterday (Monday 10 March) they’d have woken up to an instant paper loss of 15.43% today.
Their £10k would now be worth just £8,457, minus charges. That’s a brutal short-term hit. Of course, being Tesla, the stock could bounce back just as quickly. But what if this time is different?
Inevitably, Musk still believes. He says Tesla’s profits can go up 1,000% in five years. Plus it’s more than a car company, with a huge opportunity in humanoid robots, robotaxis and other cutting-edge tech advances that old fools like me don’t even get.
Musk has always played for the highest of stakes. Only investors who are willing to do the same should consider Tesla shares today.
