$Tesla (TSLA.US)$The stock price has fallen for three consecutive days, and concerns regarding weak sales and intensified competition have increased in the market.

Overnight, Tesla's stock price dropped 3.3% to $417.41, marking the third consecutive trading day of decline, with a sharp decline of nearly 5% last Friday. As of the time of writing, it is down nearly 1% in after-hours trading.

Despite the recent downturn, Tesla's stock price has still risen about 68% this year, and it is currently down 15% from the intraday record high of $488.54 set on December 18.

Factors contributing to the recent decline include, on one hand, the bearish sentiment in the US stock market, and on the other hand, the pressures faced by Tesla itself, including weak sales, Musk shifting focus away from electric vehicles, intense market competition, and the fact that the rollout of self-driving cars will require some time.

1. Bearish Market Sentiment

The overall market sentiment is the main reason for the decline in Tesla's stock price.

As the end of the year approaches, investor sentiment is generally low. Among the Dow Jones Industrial Average component stocks, all but NVIDIA saw declines among the other 29 stocks.

On the other hand, investors are concerned that the Federal Reserve's interest rate cuts in 2025 may be less than expected, and lower rates would help promote economic growth and make purchasing new cars more affordable.

According to FactSet data, Analysts have set an average Target Price of about $296 for Tesla Stocks, which is significantly lower than the current stock price. This gap may raise concerns among investors about whether the stock price is overvalued.

2. Concerns arise from stagnant sales growth.

Tesla is expected to announce its fourth-quarter delivery numbers on Thursday, with analysts projecting a total of about 0.51 million units, slightly below the company's target of 0.515 million units, and Tesla's total deliveries for 2024 are expected to be about 1.8 million units, remaining unchanged from 2023, indicating that Tesla's growth may be stagnating.

Among them, sales in major markets are declining. According to Cox Automotive estimates, Tesla's sales in the USA are expected to drop by about 6% in 2024, reaching 0.633 million units, which represents 4% of the entire Auto Manufacturers market. Sales in the EU and China markets are also expected to decline.

3. Market share faces challenges.

As other Auto Manufacturers launch more electric vehicle models, Tesla inevitably loses some of its market share. In China, competition comes from BYD, in Europe from Volkswagen and BMW, and in the USA from rivals such as General Motors and Ford.

It is particularly noteworthy that Tesla's sales have declined despite the overall growth in the electric vehicle market. According to research company Rho Motion, the global electric vehicle market has grown by 25% year-on-year as of November, but Tesla's sales are declining.

Fourth, the introduction of new models is slow, and the implementation of self-driving still requires some time.

Aside from the Cybertruck, Tesla has not introduced any new models since launching the Model Y in 2020. While investors are hopeful about a potential $25,000 low stock price model from Tesla, the company has not yet shown a prototype or disclosed more related information.

Investors have high expectations for Tesla's progress in the self-driving field, while most analysts believe that the widespread use of self-driving taxis will still take several years.

Tesla faces the challenges of declining sales and increasing market competition, but investors remain optimistic about the company's long-term prospects. The development of self-driving technology and potential policy support could be key factors driving Tesla's future growth. However, whether the company can successfully launch the highly anticipated low stock price model and how Elon Musk manages his multiple roles will be important factors affecting Tesla's development.

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Editor/ping