MW Tesla's stock is back to red: Why China full-self-driving boost was short-lived

By Tomi Kilgore and Claudia Assis

Tesla is prepping a self-driving software update in China at a time when Elon Musk appears to be hurting the EV maker's brand

Tesla Inc.'s stock fell briefly back to three-month lows on Monday after a short-lived boost from news that the electric-vehicle giant was making progress in its full self-driving offerings in China.

A Bloomberg report earlier Monday said that the EV maker was getting ready to roll out a software update for its China customers to offer driver-assistance features "similar to those marketed as Full Self-Driving in the U.S." The news item cited one person familiar with the issue.

Tesla's stock $(TSLA)$ was trading as high as 1.4% but then fell as much as 3.9% to an intraday low of $324.70, which was around the lowest closing prices seen since mid-November.

It has since bounced to trade just below the flatline.

A close in the red on Monday would be a third straight session of losses for the stock, which is down about 18% this month and has lost about a third of its value since its all-time closing high of $479.86 on Dec. 17.

The stock has struggled to trade above $400 since late January. Investors have worried that Chief Executive Elon Musk is devoting too much of his time running the so-called Department of Government Efficiency, hurting his and Tesla's image in the process. Protests against DOGE were staged near Tesla showrooms in several cities recently.

Full self-driving, Tesla's suite of advanced driver-assistance features for city driving, would face stiff competition in China, where several carmakers have offered or plan to offer advanced driver-assistance systems, or ADAS, for less money and in both luxury and lower-cost electric vehicles.

China's BYD Co. (CN:002594) (BYDDY) earlier this month said it would make its system, which it calls God's Eyes, standard even in its cheapest EVs.

Tesla still has plenty of bulls. Wedbush analyst Dan Ives said in a note Monday that, while Tesla bears will focus on the DOGE issues and brand worries, the future of the company has not changed.

Tesla has several catalysts on the horizon, Ives said, including a new mass-market vehicle launch in the first half of the year, "major" product developments around its Optimus humanoid robot, and "unsupervised" FSD launches in the U.S.

-Tomi Kilgore -Claudia Assis

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February 24, 2025 13:02 ET (18:02 GMT)

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