Tesla CEO Elon Musk said, “Trump Was Right About Everything!” While attending a cabinet meeting at the White House in Washington, DC, USA on March 24, 2025.
Carlos Barrier | Reuters
Tesla Stocks fell on Thursday, turning the course the day after the electric car maker made the biggest profits in the market since 2013.
The stock price fell 7.3% to close at $252.40 and is now down 38%, the biggest drop among Tech’s Megacap companies. That’s true, even after stocks surged 23% on Wednesday, and after their second Charpesto rally was on record.
President Donald Trump sent stocks on Wednesday after announcing that he would suspend sudden tariffs on many U.S. trading partners for 90 days to allow negotiations. He increased the Chinese tariffs, although the minimum tariff rate was set at 10% while negotiations were taking place.
The entire market has been whipping Trump’s changing plans, but Tesla has been particularly volatile, rising or falling at least 5% on 19 different occasions this year.
The slump on Thursday comes after the White House revealed that China’s tariff rate has now reached 145%. Beijing announced a mutual 84% tariff rate on US goods on April 10th. The EU said it has approved mutual tariffs on US imports.
Analysts at UBS, Goldman Sachs and Mizuho have swirled around the types of deals the US could attack, so all three have cited the impact of Trump’s auto tariff margins, cutting Tesla’s price targets.
“We expect Tesla’s stocks to be volatile, but we expect a downward slope, taking into account the abundant valuation in the Skittish market (particularly compared to other MAG7 stocks),” UBS writes. The $190 sales rating and price target also saw “demand concerns.”
Tesla experienced a deterioration in the brand, reduced delivery and was hit by protest along with several criminal acts targeting facilities and vehicles. The CEO, one of President Trump’s top advisors, drew a heat on Tesla for his work at the White House, which significantly cut government spending and federal workforce. In Europe, he faces opposition after supporting the German far-right AFD party.
Tesla sales fell across Europe in the first quarter, according to data from the European Association of Automobile Manufacturers (ACEA).
The uncertainty and threat of the new tariffs is troubling for Tesla’s margin outlook. The company sources many parts and materials from China, Mexico and other suppliers.
Tesla’s sales growth was dependent on the company’s ability to manufacture and sell large quantities of automobiles and battery energy storage systems across Europe and Asia. EV competition has recently been rising on both continents, and the company now has to compete with the highest costs imposed by taxation.
Musk removed his anger at Trump’s top trade advisor Peter Navarro, calling him “stupid” and “a carriage more than a brick bag” in a social media post earlier this week. But Musk has shown the administration’s hardline approval for China and shares a clip of X from U.S. Treasury Secretary Scott Bescent, discussing the issue.
“China’s business model is based on this incredibly unbalanced economy, and is based on exporting low-cost goods and subsidies to other parts of the world,” Bessent said in the clip.
Thursday’s selloff provided some relief to Tesla’s short seller. According to S3 Partners, Tesla’s short interest rate was around 80.5 million shares, with a float of 2.8% as of Thursday. This is one of the top four equity shorts in terms of expected value, at $17.9 billion. Short sellers bet on stock declines and lose money if they rise.
Watch: Tesla faces opportunities and challenges
