Tesla’s stock price continues to show volatility in early March trading, falling 0.9% in premarket activity after two days of gains. This follows Monday’s steep 15.4% drop that marked the company’s worst trading day in nearly five years.

The electric vehicle maker saw its shares rebound 7.6% on Wednesday and 3.8% on Tuesday. These gains came after President Donald Trump’s public commitment to purchase a Tesla Model S during a White House event with CEO Elon Musk.

Despite the recent uptick, Tesla stock remains down almost 50% from its mid-December record high. The current price hovers around $245.75 in premarket trading.

First-quarter delivery estimates are creating significant concern among investors. Wall Street’s consensus for Q1 sales initially projected around 430,000 vehicles. Recent estimates have dropped closer to 360,000 units.

This would represent a notable decline from the 387,000 cars Tesla delivered in the first quarter of 2024. Investors typically expect to see growth rather than contraction in delivery numbers.

The reason behind Tesla’s sales decline has become a point of contention. Bulls attribute much of the slowdown to production changes, particularly the Model Y update currently underway.

Data from China illustrates this impact. Tesla sold just 8,000 Model Ys in February, according to Citi analyst Jeff Chung. This represents a sharp decline from the 2024 monthly average of approximately 46,000 vehicles.

Musk’s political activities alienating potential buyers

Bears have a different perspective. They suggest CEO Elon Musk’s increasing political activities are alienating potential buyers globally. Musk’s role as head of the White House’s Department of Government Efficiency (DOGE) has generated controversy.

Registration data from the U.S. supports concerns about declining demand. S&P Global Mobility reports that Tesla’s U.S. registrations dropped to 43,411 in January, an 11% decrease compared to the previous year.

While Tesla maintained its leading position in U.S. market share at 42.5%, this figure represents a substantial 12 percentage point decline from a year ago. Meanwhile, total EV registrations in the U.S. grew by 14%.

Looking at individual models shows mixed results. Model Y registrations fell 26% in January compared to last year, with 23,898 units. This decline coincides with the ongoing product changeover at Tesla’s factories.

Model 3 sales showed strength, with registrations jumping 19% to 14,004 units. This increase follows the launch of the updated Model 3 early last year.

Tesla’s premium vehicles faced steeper declines. The Model X and Model S saw sales plunge in January, down 45% and 38% respectively.

The Cybertruck recorded 2,807 registrations in January, slightly below its monthly average of around 3,300 units. The distinctive pickup has faced price cuts, lease deals, and production reductions in 2024. Sales down 45% in Europe

International markets show even steeper declines. Tesla sales dropped 45% in Europe in January and plunged 49% in China in February.

Morgan Stanley analyst Adam Jonas maintains a Buy rating on Tesla stock with a $430 price target. His analysis includes a bear case of $200 and a bull case of $800 per share.

Jonas believes several potential catalysts could boost the stock. These include the launch of a self-driving taxi service in Austin later this year and a “Robot Day” showcasing Tesla’s AI-powered humanoid robots. Analyst maintains a Buy rating

CFRA analyst Garrett Nelson also maintains a Buy rating. He notes that Tesla “is well positioned to weather the consumer backlash with its $36B+ of cash, industry-leading gross margins, and lesser exposure to tariffs relative to other automakers.”

The road ahead remains unclear. As Morgan Stanley’s Jonas observed, “We see scope for the shares to test our $200 bear and our $800 bull case within the next 12 months.” For investors, this suggests continued volatility in Tesla stock through 2025.