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The exuberance that surrounded Tesla (TSLA) following the election of Donald Trump last November is far in the rearview mirror now as the road becomes increasingly bumpy for the EV maker. After the calendar flipped to 2025, a relentless storm of negative developments has battered shares of TSLA, which have crashed by nearly 40% on a year-to-date basis, and there doesn't appear to be any relief on the near-term horizon in terms of the news cycle. Over the weekend, Bloomberg reported that TSLA's business in China is speeding in reverse with shipments plunging by 49% in February.

This report comes on the heels of another Bloomberg report from last week that disclosed a 76% collapse in sales in Germany for February. On the home front, where TSLA has long dominated the EV market, the cracks that have emerged are widening and Elon Musk's rising status and time commitments within President Trump's sphere isn't helping the stock's cause. 

• If ever there was a time for Musk to recalibrate and return his focus fully back to his struggling EV company, this would be it. In China, TSLA's second largest market at about 20% of total sales, intensifying competition is continuing to take a major toll. According to the Bloomberg article, TSLA's market share in China has slid to less than 5%, while BYD Company (BYDDF) is growing its market share. 
• A stale product lineup that completely leans on the Model 3 and Model Y in China has opened the door for BYDDF and other upstart Chinese EV makers, such as NIO (NIO), XPeng (XPEV), and Li Auto (LI), to steal market share by launching innovative, less expensive EVs that feature cutting edge software. As an example, XPEV's January deliveries soared by 268% yr/yr, bolstered by strong demand from its recently launched MONA M03, which generated deliveries of over 15,000 units.
• Meanwhile, Musk's allegiance to President Trump -- which was initially viewed as a positive due to the anticipation of regulatory favorability towards TSLA -- is alienating a growing swath of potential customers. Last Friday, the Wall Street Journal published an article that included a very concerning data point from consulting firm Strategic Vision. Specifically, the firm noted that in 2022, 22% of car shoppers said that they would "definitely consider" purchasing a Tesla for their next vehicle. That percentage has since dropped to just 7%.
• An eroding brand is the last thing that TSLA needs right now. The EV maker is already contending with a high-interest rate environment, stiff competition, and the prospects of tariffs increasing its cost of goods. A silver lining in TSLA's downside Q4 earnings report from late January was that COGS per vehicle reached its lowest level ever at less than $35,000, driven by raw material cost improvement. Still, automotive gross margin slid by 350-bps to 13.6% as price cuts and lower ASPs more than offset the manufacturing cost improvement.

Mired in one of its worst slumps in recent history, CEO Elon Musk has been mostly missing in action and TSLA's shareholders are bailing on the stock. During the Q4 earnings call, Musk stated that 2025 may be viewed as the most important year in the company's history, making his lack of focus all the more puzzling. TSLA still has some potential game-changing growth catalysts ahead of it with the anticipated launch of its mass market Model 2 vehicle later this year, and then Cybercab next year. However, the market is losing confidence that these launches will materialize in the stated timelines, and/or whether they will be potent enough to drive robust growth amid the strengthening headwinds.