Tesla's stock closed down nearly 5% last night. Did Musk really mess this up this time? Let's talk...

This morning, I saw Tesla's stock close down nearly 5%, and the coffee I had just brewed spilled all over my keyboard. As a seasoned investor who has been following Tesla since 2019, this move sent chills down my spine. Today, let’s briefly discuss this market trend…

Tesla’s February sales in China plummeted nearly 50%! Its competitiveness in the Chinese market has significantly declined.

The delivery figures for Tesla in January and February this year are quite disappointing. Sales in the Chinese market have dropped sharply year-on-year, and the European and U.S. markets are also on a downward trend. The competition in China is particularly fierce, with brands like BYD, Li Auto, and XPeng each showcasing their unique strengths. The cost-performance advantage of Tesla’s Model 3/Y has been significantly weakened. This time, Tesla’s price-cutting strategy didn’t work; consumers aren’t buying it. Instead, it gives the impression that the brand’s premium value is eroding, making it feel like a blatant cash grab. Who dares to invest blindly now?

Elon Musk’s focus has long shifted away from car manufacturing, engaging in erratic
moves.

Recently, Musk has been busy picking fights—with the Biden administration, the media, shareholders—while dabbling in rockets and experimenting with X. His attention toward Tesla has clearly waned. Moreover, the market’s patience for future concepts like FSD (Full Self-Driving) and robots is wearing thin. Simply spinning tales without delivering results is causing the financial market to lose confidence.

While price cuts and promotions did lead to short-term sales boosts in the past, this tactic is becoming less effective, especially in the Chinese market. In contrast, BYD is steadily improving its cost-performance ratio, while Tesla appears increasingly desperate, even to the point of alienating its loyal customers (rapid price cuts have upset existing car owners). With short-term sales struggling and profit margins declining, it’s no wonder investors are unhappy.

Tesla’s current problems include declining product competitiveness, eroding market confidence, and Musk’s escalating personal issues. In the short term, there’s no clear turnaround in sight. If Tesla’s sales fail to recover in March, the stock price may continue its downward trend. In the long run, Tesla needs to find a way to prove itself again, or it risks transitioning into the era of being just a value stock.