Tesla Stock Plummets as China Sales Drop and Musk Faces Distractions

Tesla Inc. (NASDAQ: TSLA) tumbled 6.3% on Tuesday to $328.50, its lowest level since November, extending its decline as the worst-performing “Magnificent Seven” stock in 2025. Shares dipped another 0.5% in after-hours trading, with the EV giant down 13.4% year-to-date, significantly underperforming the S&P 500’s 3.4% gain.

Once buoyed by optimism over CEO Elon Musk’s role in the Trump administration, Tesla now faces mounting concerns over its fundamentals. January sales in China plunged 33% month-over-month, highlighting the automaker’s first-ever annual decline in deliveries in 2024. Competition from BYD (SZ:002594), which now offers its advanced “God’s Eye” autonomous driving system on EVs priced under $10,000, further pressures Tesla. By contrast, Tesla’s similar features start at $32,000 in China, limiting its edge in the market.

Musk’s growing focus on ventures outside Tesla adds to investor unease. His recent $100 billion bid for OpenAI, which was swiftly rejected, reignited tensions between Musk and OpenAI CEO Sam Altman. Additionally, concerns over Musk balancing Tesla with his duties in the Department of Government Efficiency, xAI, and social media platform X have weighed on investor confidence.

Further complicating Tesla’s outlook, President Trump’s newly approved 25% tariffs on steel and aluminum—critical materials for Tesla’s production—add cost pressures to an already challenging market environment.

As BYD gains ground in China and Musk’s commitments remain divided, Tesla’s struggles continue, raising questions about its future growth and market dominance.