After Tesla’s stock surged following the U.S. election, investors have watched the electric carmaker’s shares tumble more than 40% since the start of 2025. The dramatic drop has erased nearly $800 billion from the company’s peak valuation, leaving many wondering about the stock’s future.
Some investors are finding creative ways to buy Tesla shares at a discount. They’re using options strategies that let them purchase the stock for about 13% less than today’s price while targeting annual returns of 26%. This approach appeals to those who believe Tesla’s current troubles are temporary.
The company faces multiple challenges. Trump’s proposed tariffs could hurt Tesla considerably. A 25% tax on goods from Mexico and Canada might interfere with Tesla’s manufacturing operations. The 20% tariff on Chinese imports threatens 21% of Tesla’s revenue that comes from China. These policies could increase production costs and slow deliveries.
Tesla’s recent performance hasn’t helped investor confidence. The stock is down 22.5% year-to-date in 2025. First-quarter earnings disappointed investors, and second-quarter vehicle deliveries fell 13% compared to last year, dropping to 384,000 units. This reflects weak demand for electric vehicles in North America. The company’s declining margins in its core EV business have further dampened revenue prospects. Investors are looking for clarity on the company’s future strategies as they await the next quarterly update. During the upcoming earnings call, analysts will likely focus on the tesla earnings call insights regarding potential cost-cutting measures and new product developments. The broader market conditions and increasing competition from other EV manufacturers will also play a crucial role in shaping Tesla’s outlook.
Wall Street analysts can’t agree on Tesla’s value. The median price target sits at $294, but individual predictions vary widely. Goldman Sachs sees the stock reaching $315, while Mizuho lowered its target to $375. Benchmark remains the most optimistic with a $475 target, betting on Tesla’s robotaxi progress.
Ross Gerber, a prominent Tesla investor, predicts the stock could fall to $200 by year-end. He cites several concerns including the possible elimination of EV tax credits and Elon Musk’s divided attention between Tesla, SpaceX, and his role in Trump’s administration.
Tesla trades at 170 times earnings, compared to Nvidia’s 54 times. This high valuation worries some investors who think Tesla should be priced more like other tech companies. However, the stock’s price-to-sales ratio has decreased from 15 times to 11 times, potentially making it more attractive to value-focused investors. Tesla owners benefit from significantly lower maintenance costs compared to luxury rivals, spending roughly $4,287 over 10 years versus nearly $12,000 for competing brands.
Despite these challenges, some investors see opportunity in the beaten-down stock, using sophisticated trading strategies to potentially profit from any recovery.