Tesla’s stock (TSLA) has always been a wild ride, but 2025 is shaping to be one of its most turbulent years yet. The electric vehicle (EV) giant recently triggered an ominous technical signal—the “death cross”—when its 50-day moving average dipped below its 200-day moving average, a pattern historically linked to further declines 35.
This comes as Tesla’s stock has already shed over 35% of its value since January, battered by slowing EV demand, political backlash against CEO Elon Musk, and broader market chaos fueled by Trump administration tariffs 67.
But is this the beginning of a prolonged downturn or just another bump in Tesla’s volatile journey? Let’s break it down.
What Is a “Death Cross” (And Should You Panic?)
A death cross sounds apocalyptic, but it’s simply a technical indicator where a stock’s short-term momentum (50-day average) falls below its long-term trend (200-day average). For Tesla, this happened on April 14, 2025, when the 50-day MA (288.76) crossed under the 200-day MA (290.60) 3.
Historical Context: Not Always a Disaster
- The last time Tesla saw a death cross was in May 2022, preceding a 54% plunge over the next eight months 3.
- However, in February 2024, Tesla’s death cross led to a flat performance after one month, followed by a 15% gain six months later 5.
- Analysts note that while every major decline starts with a death cross, not every death cross leads to a major decline. 3.
So, is this a sell signal or a buying opportunity? The answer isn’t black and white.
Why Tesla’s Stock Is Struggling
1. Slowing EV Demand & Rising Competition
- Tesla’s Q1 2025 deliveries dropped 13% year-over-year, missing estimates by 40,000 vehicles 7.
- Rivals like Lucid (LCID) and Chinese automakers are gaining traction, while Tesla’s price cuts erode profit margins 7.
- Musk’s polarizing political stance has alienated some buyers, with protests denting Tesla’s brand reputation 6.
2. Tariffs & Market Uncertainty
- The Trump administration’s blanket tariffs have rattled global markets, including Tesla, which relies on Chinese supply chains 6.
- The S&P 500 and Nasdaq 100 also flashed death crosses, signaling broader market unease 48.
3. Technical & Psychological Pressure
- The 200-day MA (~$255) now acts as resistance, meaning Tesla must break above this level to regain bullish momentum 7.
- If the stock falls below March’s low of 222∗∗, analysts warn it could crash toward 2007.
What Happens Next?
Bull Case: A Snapback Rally?
- Some analysts argue the death cross is a lagging indicator, meaning the worst may already be over.
- Deutsche Bank maintains a “Buy” rating, calling Tesla an “embodied AI secular winner” despite short-term turbulence 13.
- If Tesla’s Q1 earnings (April 22) surprise positively, the stock could rebound sharply 5.
Bear Case: More Pain Ahead?
- RBC Capital warns that Q1 may have been boosted by pre-tariff panic buying, meaning future quarters could disappoint. 7.
- If EV demand continues softening, Tesla’s lofty valuation (P/E ~60) could face further pressure 11.
Investor Takeaway: High Risk, High Reward
Tesla remains a battleground stock—loved by bulls for its AI and energy ambitions, hated by bears for its shaky fundamentals. The death cross adds to the uncertainty, but history shows it’s not always a death sentence.
Key Questions for Investors:
✅ Will Q1 earnings stabilize sentiment? (Due April 22)
✅ Can Tesla reclaim $255 (200-day MA) to invalidate the bearish signal?
✅ Is this a long-term buying opportunity, or should investors wait for more clarity?
Final Thoughts: A Warning, Not a Death Knell
The death cross is a caution flag, not a guarantee of doom. For long-term believers, Tesla’s dip could be a chance to buy low. For short-term traders, volatility is likely to continue.
One thing’s certain: Tesla’s stock will remain one of the market’s most dramatic stories—whether that’s a tragedy or a comeback tale remains to be seen.
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