Tesla stock (NASDAQ:TSLA) experienced a brutal first quarter in 2025, dropping 34%—its worst quarterly decline in nearly three years. The downturn comes amid growing concerns over CEO Elon Musk’s controversial public statements, a weakening EV market, and increased competition.

With Tesla stock now trading more than 40% below its December 2024 highs, investors are left wondering: Is this a golden buying opportunity or a sign to steer clear?

Why Tesla Stock Is Under Pressure

Several factors have contributed to Tesla’s sharp decline in 2025:

• Elon Musk’s Controversial Public Image – The billionaire’s increasing political involvement and divisive rhetoric have alienated some consumers.

• Brand Perception Challenges – Reports of vandalism against Tesla vehicles suggest a growing backlash. Some former Tesla owners are switching to competitors like Lucid (NASDAQ:LCID), which claims that nearly 50% of its recent orders came from ex-Tesla drivers.

• Declining EV Demand – Rising interest rates and fewer government incentives are making EV adoption slower than expected.

• Geopolitical Risks and Tariffs – President Donald Trump recently announced a 25% tariff on all imported vehicles, impacting Tesla’s supply chain and production costs.

Tesla’s Competitive Edge: A Reason to Buy?

Despite the challenges, some analysts remain bullish on Tesla stock. Stifel analyst Stephen Gengaro maintains a “buy” rating with a $455 price target, suggesting a 65% upside from current levels.

Gengaro argues that Tesla is in a stronger position than legacy automakers to navigate economic headwinds. He points to:

• Tesla’s Strong Energy Business – The company’s energy storage segment continues to grow and could be a major revenue driver in 2025.

• Full Self-Driving (FSD) Developments – Tesla plans to roll out unsupervised full self-driving in Texas by June, which could be a game-changer for revenue and stock valuation.

• New Affordable EV Models – To counter slowing sales, Tesla is set to launch more cost-effective models that could appeal to budget-conscious consumers.

Wall Street’s Mixed Sentiment on Tesla Stock

While some analysts share Gengaro’s optimism, others remain cautious. Many have lowered their price targets on Tesla stock in recent weeks, citing operational risks and competitive threats.

Still, the average Wall Street price target for Tesla stock is $334, indicating over 20% upside from current levels.

Bottom Line: Is Tesla Stock a Buy?

Tesla’s current slump presents both risks and opportunities for investors. The stock is significantly cheaper compared to late 2024, and its long-term innovation pipeline remains strong. However, short-term headwinds—ranging from CEO controversies to weaker EV demand—could keep Tesla stock volatile.

For long-term investors willing to endure some turbulence, buying the dip in Tesla stock might pay off. But for those seeking stability, waiting for clearer signs of a turnaround could be the safer move.

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