Tesla’s troubles are mounting as the electric vehicle maker grapples with plummeting sales and a shrinking market share. The company’s stock has dropped 0.5% this year, making it the only “Magnificent Seven” tech company losing money. This marks a dramatic shift from September when CEO Elon Musk purchased $1 billion in shares to enhance investor confidence.
Tesla’s stock dropped 0.5% this year, making it the only “Magnificent Seven” tech company losing money.
The situation worsened dramatically in China, Tesla’s second-largest market. October sales hit just 26,006 vehicles, the lowest monthly figure in three years. That’s a staggering 35.8% decline compared to October 2024. Tesla’s market share in China has plummeted to 3.2%, down from 8.7% a year earlier. Chinese competitors are capturing Tesla’s former customers by offering smaller, more affordable electric vehicles that appeal to price-conscious buyers.
Europe faces similar challenges from local manufacturers gaining ground with competitive pricing. Meanwhile, traditional automakers are finally launching serious electric vehicle competitors. Tesla’s product lineup is starting to look outdated as competitors innovate faster and offer more options.
The company’s internal troubles are making matters worse. Key executives managing the Cybertruck, Model 3, and Model Y programs have recently departed. Omead Afshar, a top executive and longtime Musk confidant, left the company in June. No replacements have been announced, creating a leadership vacuum across critical product lines. Surprisingly, board members reportedly aren’t concerned about these departures despite the sales crisis. The departures coincide with heavy selling pressure, as major investment firms like Ark Investment Management have trimmed their Tesla positions in recent trading sessions.
Quality problems are adding to Tesla’s headaches. The company recalled approximately 10,500 residential energy products due to overheating issues. Twenty-two customers reported overheating, with five mentioning fires. These units were sold between November 2020 and December 2022. The recall compounds Tesla’s negative image during a critical sales period. Adding to customer frustration, service wait times now exceed 30 days in major metro areas, creating additional operational challenges for the struggling automaker.
Tesla’s stock suffered its worst three-day stretch since June, losing 9.7% cumulatively. The company’s largest single-day decline since July was 8.2%. As competitors strengthen their positions and Tesla battles internal challenges, the company faces mounting pressure to reverse its declining fortune and regain market confidence.