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$125 Billion Wiped Out in a Day! Why Tesla Shares Plunged 15% Under Elon Musk

On March 10, Tesla, led by Elon Musk, experienced a significant stock decline, plummeting over 15%—marking its worst trading day in more than four years. This sharp selloff resulted in a staggering $125 billion being wiped off the company’s market capitalization within a single day. To put this in perspective, Tesla’s one-day loss exceeds the combined valuation of major Indian automakers Maruti Suzuki, Tata Motors, and Mahindra & Mahindra (M&M).
The drop in Tesla’s stock price aligns with a broader downturn in the US stock market, with the Nasdaq Composite Index tumbling 4%, closing at 727.90. However, Tesla’s decline was particularly severe due to a mix of company-specific challenges, macroeconomic factors, and investor concerns over future growth prospects.
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Musk Admits Managing Multiple Businesses is 'Challenging'
Elon Musk, the world’s richest individual, admitted to facing immense difficulties in managing his six companies, including Tesla. Speaking in an interview with Fox News, Musk revealed that his role as the public face of the Department of Government Efficiency (DOGE) has added to the complexities of overseeing his businesses.
“I can’t believe I’m here doing this. It’s kind of bizarre,” Musk commented, implying that the pressure of running multiple high-profile ventures has taken a toll on him. His public acknowledgment of these struggles has raised concerns among investors about his ability to maintain focus on Tesla, particularly at a time when the company is facing growing competition in the electric vehicle (EV) market.
UBS Lowers Tesla’s Delivery Forecast and Target Price
Joseph Spak, an analyst at UBS Group AG, revised Tesla’s delivery projections downward for FY26 and for the first quarter of the upcoming financial year. Maintaining a 'Sell' rating on the stock, Spak reduced Tesla’s target price from $259 per share to $225.
According to his estimates, Tesla is expected to deliver 3.67 lakh vehicles in Q1 FY26, a notable reduction from the previous projection of 4.37 lakh. This represents a 5% year-on-year drop compared to the deliveries recorded in Q1 FY25. Spak also pointed out that demand for Tesla’s vehicles appears to be weakening, a factor that could pose further risks to the company’s revenue and profitability in the coming quarters.
Political Involvement: A Risk Factor for Tesla?
Investor sentiment has also been affected by Musk’s increasing involvement in US politics. His outspoken political views and interactions with policymakers have sparked concerns that Tesla’s brand and business operations could suffer as a result.
The China Passenger Car Association (CPCA) has warned that Musk’s political engagement might be negatively impacting Tesla’s already slowing EV sales in the country. China, one of Tesla’s most important markets, has seen increasing competition from domestic automakers such as BYD, which has been rapidly gaining market share. Any political tensions or regulatory roadblocks in China could further weaken Tesla’s position in the region.
Declining Sales in Europe and China Amid Tariff Concerns
Tesla is also grappling with a decline in sales in both Europe and China, with market analysts pointing to the impact of stringent tariffs imposed by US President Donald Trump’s administration. These tariffs have created uncertainty in global trade, leading to rising costs and slowing demand for Tesla’s vehicles in key international markets.
Additionally, delays in securing approval for Tesla’s semi-autonomous driving features in China have further compounded the company’s challenges. Regulatory hurdles in China’s automotive sector have made it difficult for Tesla to introduce new features, potentially limiting the appeal of its vehicles to consumers who seek advanced driving technologies.
Looking Ahead: Can Tesla Recover?
Despite the sharp decline in Tesla’s stock price, some analysts believe the company still has strong long-term potential. Tesla remains a leader in EV innovation, battery technology, and autonomous driving. However, in the short term, the company faces several headwinds, including slowing demand, regulatory challenges, and Musk’s own distractions with other ventures.
Tesla’s ability to navigate these issues, regain investor confidence, and stabilize sales in critical markets like China and Europe will determine whether it can recover from this significant setback. With growing competition from traditional automakers and emerging EV startups, Tesla will need to focus on strategic growth and operational efficiency to maintain its position as a market leader.
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