Last year, Tesla (TSLA) shares faced selling pressure after CEO Elon Musk led the government’s Department of Government Efficiency. After he left, that became a distant memory. TSLA stock closed at $438.07, not far from last month’s $498.83 52-week high.
For several years before that, China’s electric vehicle firms had taken a significant share of Tesla’s global market. Last Friday, BYD (BYDDF) announced a milestone. It became the world’s biggest seller of EVs in 2025.
BYD sold 2.26 million EVs, up by 28%. Before this major milestone, meme traders brushed off the threat of China's EV firms building their dominance. They also dismissed the impact of the government ending subsidies. EV tax credits worth $7,500 are the primary reason for Tesla posting a decline in sales.
Tesla Sales Drop
To get ahead of the bad news cycle, Tesla disclosed that fourth-quarter EV sales did not meet consensus estimates. Deliveries of 418,227 are below the 423,000 target. This is down by 16% Y/Y.
Risks
Tesla will need to talk up robotics, AI, self-driving software, and battery storage to sustain the stock’s momentum. However, generous compensation for executives, especially for the CEO, are ongoing risk. If insiders continue to sell into the rally, the TSLA stock momentum that valued shares at a nearly 300x price-to-earnings ratio might finally end.
