Drop in sales sends Tesla stock to 2025 lows

Tesla shares started the new week with a decline to the lows of the current year. Prices did not reach the level of 373, having fallen by almost 5% at the end of the trading session on Monday. If buyers fail to seize the initiative in the coming days, the price risks to fall to the early December levels around 350. Yesterday's sales data speaks in favor of the continuation of the downward movement.

The California Automobile Dealers Association presented statistics for the year 2024. The company's share of the largest US market for electric cars fell from 60.1% to 52.5%. Tesla's electric cars registered an 8% drop in sales between October and December, and a 12% drop for the past year. Only the Cybertruck model is in high demand among California residents, while other Tesla cars are losing competition to Honda and Kia.  

A similar situation is observed in the European markets. According to French industry association La Plateforme Automobile, only 1141 Tesla electric cars were sold in the country in January, down 63% year-on-year. This indicator is also the absolute minimum since August 2022. January statistics for Germany are not yet available, but they are unlikely to be better than the 41% drop in sales at the end of last year.

Analysts Bloomberg and Reuters attribute the negative dynamics of Tesla's business to the actions of the head of the company. Elon Musk actively supports Donald Trump's policies, which has turned many EU countries against him, as well as supporters of the US Democratic Party. According to Evercore ISI experts, unless Musk can get significant incentives for Tesla from the new US president, the company's stock will be sharply overvalued. The benchmark of Evercore ISI is the level of 275.

The Stochastic indicator confirms the sell signal. The next target for the bears on Tesla shares may be the level of 350.

Consider the following trading strategy:

Sell TSLA in the range of 370–390. Take profit — 350. Stop-loss — 420.