Tesla Stock Continues to Show Bearish Signals
Unfortunately for investors, there’s no sign the downtrend is nearing its end. Tesla stock remains below its 50- and 100-Moving averages.
Quick overview
- Tesla shares have dropped 24% this year, with a 40% decline since their all-time high in December.
- The stock remains in bearish territory, consistently falling below key moving averages with no signs of recovery.
- Recent political clashes and the elimination of the federal EV tax credit have further dampened investor sentiment.
- Earnings-per-share forecasts for Tesla have been significantly revised downward, indicating a challenging outlook ahead.
Shares of Tesla, the electric vehicle giant led by billionaire Elon Musk, are down 24% so far this year—and the outlook remains bleak, both technically and fundamentally.
Gone are the boom days of 2021 and 2024. Tesla stock is now firmly in bearish territory, with little sign of a near-term reversal. Since reaching its all-time high in December, the stock has lost 40% of its value, dropping from a market capitalization of $1.54 trillion to just $951 billion.
No Clear Upside in Sight
Unfortunately for investors, there’s no sign the downtrend is nearing its end. Tesla stock remains below its 50-, 100-, and 200-day moving averages, reinforcing the technical bearishness.
Recent developments have only worsened sentiment. On Monday, another public clash between President Donald Trump and Elon Musk made headlines, as the Tesla CEO announced plans to form his own political party—an idea Trump sharply criticized.
In parallel, the new tax and spending law signed by Trump on July 4 will eliminate the federal EV tax credit as of September 30—a major blow to Tesla, according to Wall Street analysts.
A Major Setback for Elon Musk
The elimination of corporate average fuel economy (CAFE) penalties further complicates Tesla’s outlook. Unlike the EV tax credit, the loss of regulatory credit revenue is expected to hit Tesla’s profitability directly, prompting a wide-scale reset in financial models across Wall Street.
According to a recent J.P. Morgan report, earnings-per-share (EPS) forecasts for Tesla have seen sharp downward revisions since October 2022:
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- 2025 EPS: Down 77%
- 2026 EPS: Down 70%
- 2027 EPS: Down 71%
With both regulatory and political headwinds building, Tesla faces one of its most challenging periods since going public.
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