Tesla’s premium valuation, long supported by high growth rates, disruptive technology, and Musk’s personal brand, is looking increasingly difficult to defend.

Tesla met lowered expectations. Sales fell 13.5% year over year, and estimates for the second quarter started out closer to half a million car sales at the start of 2025. Coming into Wednesday trading, Tesla stock had fallen for six consecutive days, losing 14% over the span.

Investors were increasingly anticipating a bad number, given several recent reports of sales weakness in Europe and China. To add to the anxiety, Tesla Chief Executive Elon Musk renewed his feud with President Donald Trump this week by criticizing the budget bill that barely passed the Senate.