The stock price of Tesla is currently in a difficult situation as it reaches August 2025. The share price last week slumped nearly 70% when Elon Musk indicated that the company is going in a transition period. One main cause of this is the expiration of the US electric vehicle tax credits that have played a central role in improving sales. Part of the recent change of government policy to remove the benefit of $7,500 which will commence in September. This implies that buyers will not be as eager to buy Tesla cars in the near term thus, the demand will be slackened.
Using the Tesla Model Y, the price is currently at $44,990, and with the tax credit, it is today priced at $37,490. When this reduction is no longer there, then the increased upfront price may encourage potential customers to change their plans. There have been rumors that Tesla was losing money long before this change occurred. It had recently reported lower profits, dropping 12% in terms of revenue and 16% in terms of profit. This disaster sent Tesla back out of the trillion-dollar valuations bracket, an additional worry to its investors.
There is also increasing competition. Both European and Chinese vehicle companies are making inroads and are providing cheaper versions of EV that can counter Tesla on both price and features. Analysts currently observe greater risk in the downside of the stock in August. As assumed by Traders Union, the average price will fall to about $304 next month and it may fall to $274 on a long-term negative trend. The price of the stock now stands at about $316.
How Tesla can adjust to these changes will be challenged in the months to come. It would be necessary to depend more on the strength of the brand, products and innovative prices strategies to stand the ground without the tax credits. Until such time, the sentiment is bearish. Investors might just wish to sit and observe the way the next few quarters will turn out, before doing anything.