Tesla Stock Plunges 5.23% Amid Musk Controversy, Safety Concerns

On April 7, 2025, Tesla's stock experienced a significant drop of 5.23% in pre-market trading, reflecting the ongoing challenges and uncertainties facing the electric vehicle giant.

One of the primary factors contributing to Tesla's recent stock decline is the political and brand-related issues surrounding CEO Elon Musk. Wedbush Securities analyst Daniel Ives, who has been a long-time bull on Tesla, has expressed concerns about the brand's image and the impact of Musk's public statements and political involvement. Ives has lowered his target price for Tesla from $550 to $315, citing the brand crisis and the broader economic uncertainties.

Additionally, the recent accident involving a Tesla vehicle in China has raised questions about the safety and reliability of Tesla's products. The incident, where a Tesla crashed into a flower bed and damaged several other vehicles, has sparked discussions about the company's safety features and the potential impact on consumer confidence.

Tesla's first-quarter deliveries also fell short of expectations, with a 13% year-over-year decline. This drop in deliveries, coupled with increasing competition from other electric vehicle manufacturers, has further weighed on the stock. The company's performance in key markets like Europe and China has been particularly disappointing, with competitors like BYD gaining market share.

Overall, the combination of political and brand-related issues, safety concerns, and disappointing sales figures has created a challenging environment for Tesla. Investors are closely monitoring the situation, and the company's ability to navigate these challenges will be crucial for its future performance.