Tesla stock was dropping early Tuesday after falling in the previous session as investors considered tariffs, weak Chinese sales data, and the impact of a “buyers strike” on the electric-vehicle maker.
Tesla stock was down 7.3% in early trading at $263.82, while the S&P 500 and Dow Jones Industrial Average were down about 1.4% and 1.3%, respectively.
Shares were up roughly $12, or 5%, since the Nov. 5 presidential election. On Dec. 17, they traded above $480.
There was some good news for investors, though. Preliminary U.S. data show a February rebound for Tesla. It sold about 42,000 cars in the month, up about 14% from the 37,000 sold in February 2024, according to Ward’s Automotive.
February data wasn’t uniformly positive. Early numbers from the China Passenger Car Association—they showed Tesla’s February wholesale number, which includes exports and retail sales, dropped 49%—helped push shares down.
It’s a steep drop, likely affected by Tesla’s Model Y changeover. The company recently started selling an updated version of its best-selling vehicle. Updating models often means losing production as plants go off line so tooling can be updated.
The Chinese February drop follows January sales data that showed Tesla underperforming in the U.S., Europe, and China. Sales fell year over year in all three regions.
In a Monday report, Morgan Stanley analyst Adam Jonas characterized weak sales numbers as a “buyers’ strike,” with CEO Elon Musk’s increasingly political activity turning off core Tesla buyers—politically left-leaning people looking to go green.
The data have left investors looking for any new positives. Few have emerged.
Jonas isn’t all that bothered by the sales decline. He doesn’t view Tesla as just a car company. He sees it as an AI play. Tesla uses AI computing to train its cars to drive and train humanoid robots it hopes to start selling as soon as 2025.
“While the journey may be volatile and nonlinear, we believe 2025 will be a year where investors will continue to appreciate and value these existing and nascent industries of embodied AI where we believe Tesla has established a material competitive advantage,” he wrote.
Jonas rates shares Buy and has a $430 price target for the stock. Only $86 of that price target is represented by the car business.
Overall, 47% of analysts covering the stock rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Tesla stock is about $379.
Tesla stock tried to rally on Monday, at the start of a new month. Shares were in the green early, but the market just didn’t cooperate. The stock lost 2.8% while the Nasdaq Composite plunged 2.6% as investors weighed the impact of President Donald Trump’s trade policies on the U.S. economy.
Tariffs of 25% on Canadian and Mexican imports went into effect on Tuesday. That has the potential to raise costs for all auto makers. Tesla assembles its cars for the North American market in the U.S., but parts come from elsewhere.
Tariffs are another thing for Tesla investors to worry about.
Write to Al Root at allen.root@dowjones.com