Tesla’s TSLA stock suffered a massive drop on March 10, 2025, plunging 15%, marking its worst single-day performance since September 2020. This steep decline came on the heels of a broader market downturn, with the Nasdaq index falling nearly 4%—its sharpest decline since 2022. Shares slumped 3% after hours.

Longest Losing Streak Since 2010

On March 7, 2025, Tesla stock wrapped up its seventh successive week of losses, making it the company’s longest losing streak since its Nasdaq debut in 2010. Since peaking at $479.86 on December 17, Tesla shares have nosedived over 50%, wiping out more than $800 billion in market capitalization. Monday’s downturn ranked as the stock’s seventh worst trading day in history.

Reason Behind the Fall in Tesla Shares

Analyst Downgrades and Lower Delivery Forecasts

Tesla’s stock decline aggravated on Monday after UBS Group AG analyst Joseph Spak reduced his delivery forecasts for both the first quarter and the full year, as quoted on livemint.com. Ben Kallo of Robert W. Baird & Co. also lowered his delivery estimates on March 6, mentioned on the same source.

Spak now expects Tesla to deliver just 367,000 vehicles this quarter, a 16% cut from his previous projection. He also predicts Tesla’s annual sales will decline by approximately 5% in 2025, rather than surpassing last year’s figures.

Analysts at Bank of America's wrote in a report on Monday that Tesla's new vehicle sales declined about 50% in Europe in January from a year earlier, as quoted on CNBC. Fading brand appeal and consumer delay in purchasing —partly due to the anticipated release of a new Model Y—led to the slump.

Concerns Over Trump Administration’s Tariff Plans

Investors are also wary of uncertainty surrounding President Donald Trump’s tariff moves, which could impact Tesla’s supply chain. Canada and Mexico are crucial markets for automotive suppliers, and increased tariffs could lead to higher production costs and potential trade disruptions. However, tariffs on Canada and Mexico have been delayed as of now.

Reputation Damage and Declining Sales in Key Markets

Musk’s political involvement and controversial rhetoric have impacted Tesla’s reputation, particularly in major EV markets. In Germany, Tesla vehicle registrations fell by 70% in the first two months of the year, probably due to Musk’s involvement in the country’s closely contested federal elections.

What Should be Your Stance?

Tesla stock is highly priced compared to the underlying industry metrices. Hence, such a correction can be considered healthy. Tesla shares rallied a lot after Trump’s win.

Based on short-term price targets offered by 34 analysts, the average price target for Tesla is $338.00, with forecasts ranging from a low of $120.00 to a high of $550.00. This average price target represents an upside of 52.1% from the last closing price of $222.15. Although analysts may cut price targets in the coming days, a steep decline in Tesla stock on March 10 may create opportunities for near-term upside.

Tesla-Heavy ETFs in Focus

While Tesla’s fundamentals do not seem extremely strong right now, Trump’s win could create some indirect opportunities for Tesla. Hopes for federal deregulation on autonomous vehicles are tailwinds. However, we are yet to get any definitive clue on that.

Against this backdrop, investors should keep a close eye on Tesla-heavy exchange-traded funds (ETFs) like Nightview Fund NITE, Consumer Discretionary Select Sector SPDR Fund XLY and ARK Autonomous Technology & Robotics ETF ARKQ.The ETF approach always minimizes the company-specific concentration risks.

Investors should note that there is an ETF called the YieldMax TSLA Option Income Strategy ETF TSLY, which offers some downside protection. The TSLY ETF seeks current income and exposure to the share price of the common stock of Tesla, Inc., subject to a limit on potential investment gains. The fund yields 135.81% annually and charges 99 bps in fees.

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This article originally published on Zacks Investment Research (zacks.com).

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