Tesla Plunges 5.7% Amid Regulatory Scrutiny and Slumping Cybertruck Demand – What’s Next for TSLA?

Summary
• Tesla’s stock nosedives 5.7% intraday to $406.04, erasing $24.56 from its value in under 4.5 hours.
• Intraday range widens to $424.5 (high) to $404.76 (low), signaling heightened volatility.
• Options market frenzy: 2025-11-21 put options on 390-strike price see 6,108 contracts traded, a 255.61% surge.
• Sector leader Rivian (RIVN) mirrors Tesla’s pain, down 4.62%, as EV sector grapples with waning demand and regulatory headwinds.

Today’s selloff in Tesla’s shares reflects a perfect storm of regulatory scrutiny over its self-driving tech, disappointing Cybertruck sales, and a broader market rotation away from speculative EV plays. With the stock trading near its 200-day moving average and options volatility spiking, investors are scrambling to assess whether this is a buying opportunity or a deeper correction.

Regulatory Headwinds and Cybertruck Slump Fuel TSLA’s Freefall
Tesla’s sharp decline stems from a confluence of factors. First, U.S. regulators have intensified investigations into its Full Self-Driving (FSD) software, citing safety concerns after multiple incidents involving vehicles driving on the wrong side of roads. Second, recent reports reveal Cybertruck sales have plummeted by 63% year-over-year, with Elon Musk’s SpaceX and xAI reportedly buying unsold units to stabilize production. Third, the broader EV sector is under pressure as Chinese rivals like BYD gain market share, forcing Tesla to slash prices on its Model Y in Europe. Compounding these issues, the options market’s aggressive put buying—particularly on the 390-strike price—signals deepening bearish sentiment among institutional and retail investors.

EV Sector Under Pressure as Rivian Mirrors Tesla’s Slide
Tesla’s struggles are emblematic of broader challenges in the EV sector. Rivian (RIVN), the sector’s current leader, has mirrored Tesla’s decline, falling 4.62% on the same day. This parallel underscores a sector-wide correction as investors reassess valuations amid slowing demand, regulatory risks, and intensifying competition. While Tesla’s premium brand image and AI ambitions still attract long-term buyers, its near-term pain reflects the sector’s fragility in a high-interest-rate environment.

Options Playbook: Capitalizing on TSLA’s Volatility with Strategic Put/Call Pairs
• MACD: 3.74 (bearish divergence from 7.62 signal line)
• RSI: 45.35 (oversold territory, but bearish momentum persists)
• Bollinger Bands: 404.76 (lower band) vs. 422.81 (middle band) – price near critical support
• 200D MA: 338.41 (below current price, but bearish crossover likely)

Tesla’s technicals paint a mixed picture. While RSI suggests oversold conditions, the MACD histogram’s -3.88 and Bollinger Bands’ compression indicate a bearish bias. Key levels to watch: 428.86 (30D support) and 325.39 (200D support). The 400-strike call options (TSLA20251121C400) and 390-strike puts (TSLA20251121P390) offer strategic entry points for traders.

Top Put Option: TSLA20251121P390
• Strike: $390 | Expiry: 2025-11-21 | IV: 53.44% (elevated)
• Delta: -0.3048 (moderate sensitivity)
• Theta: -0.0702 (slow time decay)
• Gamma: 0.0103 (moderate sensitivity to price swings)
• Turnover: $2.7M (high liquidity)
• Leverage Ratio: 58.56% (attractive for aggressive short-term bets)
This put option stands out for its high leverage and liquidity, ideal for capitalizing on a potential breakdown below $400. A 5% downside scenario (to $385.74) would yield a payoff of $4.26 per contract, offering a 14.1% return on the $3.02 premium.

Top Call Option: TSLA20251121C410
• Strike: $410 | Expiry: 2025-11-21 | IV: 51.74% (moderate)
• Delta: 0.4638 (balanced sensitivity)
• Theta: -1.5283 (rapid time decay)
• Gamma: 0.0121 (high sensitivity to price swings)
• Turnover: $10.9M (exceptional liquidity)
• Leverage Ratio: 36.38% (suitable for bullish bounces)
This call option balances risk and reward, offering exposure to a potential rebound above $410. A 5% upside scenario (to $426.34) would yield a $16.34 payoff, translating to a 40.7% return on the $40.20 premium.

Trading Insight: Aggressive bears should prioritize TSLA20251121P390 if Tesla breaks below $400. Bulls may consider TSLA20251121C410 for a short-term bounce, but watch for theta decay as expiry nears.

Backtest Tesla Stock Performance
Below is an interactive event-backtest module summarising how Tesla (TSLA.O) has traded after any day it closed down at least 6 percent (from 1 Jan 2022 through 12 Nov 2025).Key takeaways (30-day window after each ≥ 6 % down-day):• 52 qualifying events were identified. • Average performance: -0.14 % (1-day), +1.12 % (2-day), turning positive after day 2. • Cumulative average return reached +6.1 % by day 30, but improvements were not statistically significant at conventional levels. • Win-rate fluctuated around 50-57 %; no persistent edge detected. • Benchmark (buy-and-hold TSLA) outperformed the event strategy until roughly day 20; thereafter event returns slightly exceeded. Interpretation: A sharp single-day drop (≥ 6 %) in TSLA has not, on average, led to a strong short-term mean-reversion edge over the last ~4 years. Further filtering (e.g., by market regime, volume spike, macro backdrop) or adding risk-management rules may be required to enhance performance.Feel free to explore the interactive charts above for detailed P&L curves, holding-period heatmaps, and distribution statistics, or let me know if you’d like deeper cuts (e.g., different thresholds, intraday data, or regime filters).

TSLA at Crossroads: Regulatory Risks vs. AI-Driven Optimism – Act Now
Tesla’s 5.7% drop reflects immediate risks from regulatory scrutiny and weak sales, but its long-term AI and energy ambitions remain intact. The stock’s proximity to the 200-day moving average and the options market’s bearish tilt suggest further near-term volatility. Investors should monitor the 400-strike level as a critical inflection point—break below it, and the 390-strike puts gain urgency. Meanwhile, Rivian’s 4.62% decline as sector leader highlights the EV sector’s fragility. For now, prioritize defensive positioning with the TSLA20251121P390 put or a cautious long on the 410-strike call. The next 48 hours will test whether this selloff is a buying opportunity or a deeper correction.