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Tesla's stock plummeted 6% on Tuesday, marking its fifth consecutive day of decline and erasing over $200 billion in market value, as multiple challenges converged to test investor confidence. The electric vehicle maker's shares fell to $328.50, representing a nearly 17% drop over the past week.
The selloff intensified after Chinese competitor BYD announced a strategic partnership with DeepSeek to develop autonomous vehicle technology. BYD's announcement that it would integrate partially automated driving systems into at least 21 new models heightened concerns about Tesla's competitive position in the autonomous driving space.
Morgan Stanley analysts highlighted the significance of this development in a note to clients: "In our view, competition between Waymo, Tesla and a host of Chinese players is a key driver on the path to commercialization of robotaxis." The firm maintains a buy rating on Tesla with a $430 price target.
Elon Musk's expanding portfolio of commitments has added to investor unease. Beyond his roles at Tesla, SpaceX, and X, Musk has emerged as a key figure in the Trump administration's Department of Government Efficiency (DOGE). His latest venture – a reported $97.4 billion bid to acquire OpenAI – has further complicated the narrative.
Marc Toberoff, Musk's attorney, confirmed the OpenAI bid details: "Whether Sam Altman chose to provide or withhold this from OpenAI's other Board members is outside of our control," he stated after sending a detailed four-page letter to OpenAI's counsel.
The timing of Tesla's autonomous driving ambitions has also come under scrutiny. While Musk announced plans to launch "Unsupervised Full Self-Driving" and a driverless rideshare service in Austin by June 2025, competitors like Alphabet's Waymo are already operating robotaxi services in multiple cities.
Oppenheimer analysts expressed concern about Tesla's market position: "Even if Tesla meets its June 2025 timeline for driverless cars in Texas, the company is one of several autonomous technology providers, suggesting competition on price and performance."
The analysts also pointed to potential risks stemming from Musk's involvement with the Trump administration, noting that his public persona "risks alienating consumers and employees as the Trump administration tests the limits of its power." This concern is supported by recent vehicle registration data showing significant declines in California and European markets.
The company faces increasing pressure to maintain its leadership position in the electric vehicle market while managing the impact of its CEO's diverse interests and the growing competitive threat from both established players and emerging rivals.
