On February 25, 2025, Tesla's share price closed at US$302.8 with a drop of 8.39%. Its market value fell below the US$1 trillion mark for the first time since November 7 last year, and it evaporated US$89.2 billion in a single day. The cumulative year-to-date decline reached 25%, more than 35% less than the historical high in December 2023.This plunge not only reflects the capital market's deep doubts about Tesla's technology path and market prospects, but also reveals the vulnerability of its global strategy under multiple pressures.

Trust crisis in autonomous driving technology: The gap from "futures" to "disappointment"

The direct trigger for this stock price shock was that Tesla's Autopilot automatic assisted driving function on urban roads launched in the China market encountered collective disappointment among users.Although this feature is promoted as "optimizing existing NOA automatic assisted navigation driving" and promises to achieve navigation guidance, traffic light recognition and automatic lane change on controlled roads and urban environments, the actual experience is widely criticized by car owners as "not far from the fully autonomous driving (FSD) promised by Musk."What makes the market even more uneasy is that Tesla's official website has quietly downgraded the FSD description from "fully autonomous driving capability" to "intelligent assisted driving function." This wording adjustment has been interpreted as an implicit admission that the implementation of technology has been hindered.At the same time, China's local car companies such as BYD and Xiaopeng have rapidly iterated their smart driving technology, seizing the market with "free opening" or "standard" strategies, further weakening Tesla's technological aura.InvalidParameterValue

European market collapse: structural recession and competition stall

If the crisis of technological trust is a short-term emotional shock, Tesla's structural decline in the European market has exposed deep cracks in its globalization strategy.In January 2025, Tesla's new car registrations in the European Union, European Free Trade Association and UK markets plunged 45.2% year-on-year to 9945 vehicles, of which sales in Germany and France plunged 59.5% and 63% respectively. The UK market was overtaken by BYD.Ironically, overall sales of electric vehicles in Europe increased by 37.3% during the same period, and its market share climbed to 15%. Tesla's bucking decline highlighted the dual weakness of its product competitiveness and market adaptability.Analysts point out that China car companies are rewriting the competitive landscape through cost advantages and localization strategies (such as a 37% surge in SAIC Motor's registrations in Europe), while Tesla's excessive pricing and slow model updates make it difficult to cope with demand diversion in the mid-end market.InvalidParameterValue

Musk's "distraction" and political risk: From innovative icons to controversial symbols

CEO Elon Musk's personal behavior has also become an invisible drag on the stock price.His permanent presence in Washington to lead the Trump Administration's Department of Efficiency (DOGE) and intervene in layoffs by regulators has triggered public doubts about his "conflict of political and business roles." In addition, he donated US$290 million to the Republican Party in 2024, which directly intensified social confrontation. Emotional, causing damage to Tesla's brand image.Investors worry that Musk's aggressive stance in the political field has not only distracted him from his core business, but may also lead to policy backlash-for example, the Trump administration's policy of imposing tariffs on China has hit Tesla's sales in Europe.Ross Gerber, CEO of Gerber Kawasaki Wealth Management, bluntly stated that Musk's "distraction" and Tesla's high valuation (PE still reached 112 times after the collapse) constitute a "dangerous combination", which may trigger a further 50%.InvalidParameterValue

Deteriorating financial fundamentals: Price wars and profit model challenges

Tesla's financial data is also not optimistic.In the fourth quarter of 2024, revenue fell 8% year-on-year, and operating profit plummeted 23%, mainly due to the continued decline in the average selling price of major models such as Model 3/Y.Although the company is trying to strengthen its supply chain by acquiring the assets of bankrupt German supplier Manz, analysts question the difficulty of reversing the capacity and cost dilemma in the short term.What is more serious is that Tesla's profits are highly dependent on software services (such as FSD), and technical bottlenecks and regulatory restrictions have led to weak growth in the business. In the first quarter of 2025, FSD's entry into China again skipped its ticket, further reducing its imagination.InvalidParameterValue