Tesla Stock Tumbles 15% Amid Recession Fears and Delivery Downgrades

Tesla's (TSLA.US) stock continued its decline this Monday, failing to recover despite investor hopes for market stabilization. Intensifying concerns over an economic recession were compounded by Wall Street analysts lowering Tesla's delivery expectations, prompting a significant 15.43% drop in the stock, closing at $222.15.

UBS analyst Joseph Spak revised his estimate for Tesla's first-quarter deliveries from 437,000 units down to 367,000, a stark contrast to market consensus. He also cut his 2025 projection to 1.7 million deliveries, well below the prevailing market expectations of 2 million. Spak attributed this adjustment to Tesla's current delivery cycle, pricing strategy, and initial sales data showing signs of weakness, leading him to downgrade Tesla's stock rating to "sell" and lower the target price to $225 from $259.

The company is experiencing its most severe downturn in recent history, with shares plummeting approximately 45% from February to March. Despite this, Tesla's stock has managed a 27% increase over the past year, peaking at an all-time high of $488.54 in December 2023. However, the current market climate leaves investors uncertain about future performance.

On Monday, the broader US stock market also struggled, with the S&P 500 dropping 2.7% and the Dow Jones Industrial Average down by 2.08%. Additionally, comments from President Trump, who did not rule out a potential recession in 2025, fueled further economic concerns.

Investors had hoped for some positive developments, yet the past month's reality saw Tesla's stock decrease by 26%. An unexpected risk factor emerged with the rising prominence of DOGE, further complicating Tesla's market position.

Google search trends showed a peak interest in "DOGE" on February 20, surpassing that for "Tesla," amid controversies surrounding Musk's involvement in the newly formed government efficiency department, which incited protests linked to DOGE and Tesla.

The influence of DOGE appears to be waning, but analysts suggest its long-term impact is still worth monitoring. They anticipate the DOGE project will persist until July 2026, potentially continuing to sway Tesla's stock performance.

Overall, Tesla faces multiple short-term challenges, with pressures arising from recession fears, downgraded delivery expectations, uncertainties surrounding DOGE, and a generally weak US stock market. Investors are closely monitoring upcoming quarterly delivery data and advancements in Tesla's autonomous driving initiatives to gauge future growth potential.