Investing.com-- Tesla’s shares fell sharply on Tuesday, furthering the company’s position as the worst performing “Magnificent Seven” stock this year, amid a storm of negative factors for the electric vehicle maker.
Tesla Inc (NASDAQ:TSLA) slid 6.3% to $328.50- its weakest level since late-November. The stock fell another 0.5% in aftermarket trade.
Tesla is the worst-performing stock among its Magnificent Seven peers so far in 2025, having lost about 13.4%, vastly lagging a 3.4% rise in the S&P 500.
While the stock had rallied to record highs in November, amid increased optimism over CEO Elon Musk’s role in the Donald Trump administration, this optimism has largely cooled in recent months, as Tesla’s fundamentals painted a weak picture.
The EV maker’s China sales slid 33% month-on-month in January, amid stiff competition from local rivals such as BYD (SZ:002594) Co Ltd (HK:1211). The China sales drop also further underscored declining vehicle sales for the company, which clocked its first ever annual fall in deliveries in 2024.
Concerns over competition from BYD were exacerbated this week by the company offering its “God’s Eye” advanced autonomous driving features on most of its models, including its lowest-priced EVs, some of which cost less than $10,000.
By comparison, Tesla only has these features available in its EVs starting from $32,000 in China.
Competition from BYD also lessens the potential for autonomous vehicles serving as the next leg of growth for Tesla- a scenario that has been constantly touted by Musk.
BYD’s offerings come amid a bitter price war between the company and Tesla to capture a greater share in the lucrative Chinese market- one that BYD now appears to be winning.
Tesla was also dented by concerns over CEO Musk’s attention being divided between his responsibilities in the EV maker, his duties as part of the Department of Government Efficiency, and his management of several other ventures, including xAI and social media platform X.
These concerns came to fore this week as Musk made a nearly $100 billion offer to take over artificial intelligence start-up OpenAI- an offer that was soundly rejected.
But Musk also harshened his rhetoric against the start-up- which he had co-founded in 2015- over its attempts to pivot into a for-profit status. He lashed out against OpenAI CEO Sam Altman on social media.
Additionally, Tesla also faces headwinds from President Trump’s protectionist trade agenda. Trump on Tuesday approved 25% tariffs on steel and aluminum- both key materials for Tesla.