Tesla shares took a nosedive, plummeting by over 8%, with its market capitalization slipping below the $1 trillion threshold, marking a year-to-date decline of 25%. Chinese customers have voiced dissatisfaction with the performance of Tesla's Full Self-Driving (FSD) system, while intensifying market competition has eroded investors' faith in Tesla's technological supremacy. Furthermore, the ongoing controversy regarding Musk's leadership of the government efficiency division has further tarnished Tesla's brand reputation.

Tesla projects a decline in both revenue and operating profit for the fourth quarter of 2024, citing price reductions for its flagship models and a decreasing trend in vehicle registrations across Europe. Sales in California have seen a year-on-year drop of 11.6%, prompting analysts to warn that Tesla is grappling with a trifecta of challenges: technological constraints, political risks, and heightened market competition.