Tesla’s stock experienced a drop today (June 2, 2025) due to several factors affecting investor sentiment. Recent news about the company’s product strategy and sales performance has created uncertainty in the market.
According to today’s reports, Tesla’s stock is declining following news about the company’s $25,000 electric vehicle project. Reuters reported that Tesla has moved away from this long-anticipated lower-cost vehicle (often called the “Model 2”) and is instead focusing on more affordable versions of its existing Model 3 sedan and Model Y SUV[3]. This strategic shift has reportedly caused internal debates among Tesla executives and raised questions about the company’s direction in the competitive EV market[3].
The news about the $25,000 EV project has been controversial, with CEO Elon Musk previously denying a Reuters report from April 2024 that claimed the project was canceled. Despite Musk’s public denial, sources familiar with the matter indicate that he told executives “the project was still dead,” creating confusion among senior management[3]. This uncertainty appears to be weighing on the stock today.
Additionally, Tesla has been experiencing declining sales in the U.S. market. In Q1 2025, deliveries fell approximately 15% year-over-year[1]. This sales downturn contrasts with a recent stock rally – Tesla shares had risen approximately 20% in May and 61% since April 8, closing at $357 on May 28[1]. That rally was largely driven by analyst enthusiasm for Tesla’s autonomous-vehicle initiatives, robotaxi plans, and AI businesses rather than its core automotive sales[1].
Technical analysis also indicates some weakness in Tesla’s stock performance. After pushing through resistance levels last week, the stock fell back and closed below key technical indicators on Friday, suggesting a potential reversal of the recent uptrend[2].