Tesla's stock price has fallen for three consecutive days, with increasing market concerns about weak sales and intensified competition.

Overnight, Tesla's stock price dropped by 3.3% to $417.41, marking the third consecutive trading day of declines, and last Friday Tesla's stock price plummeted nearly 5%.

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

Factors leading to the recent decline include, on one hand, the poor mood in the USA stock market, and on the other hand, pressures faced by Tesla itself, including weak sales, Musk focusing on areas outside of electric vehicles, intense market competition, and the implementation of Self-Driving Cars requiring more time.

1. Poor market sentiment

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

As the end of the year approaches, investor sentiment is generally low. Among the components of the Dow Jones Industrial Average, all 29 stocks fell, except for NVIDIA.

On the other hand, investors are concerned that the Federal Reserve's rate cuts in 2025 may not be as expected. Lower interest rates are conducive to promoting economic growth and making new car purchases more affordable.

According to FactSet data, the average Target Price set by analysts for Tesla Stocks is approximately $296, far below the current stock price. This gap may raise concerns among investors about whether the stock price is overvalued.

II. Concerns Arise from Stalling Sales Growth

Tesla is expected to announce its fourth-quarter delivery numbers on Thursday, with analysts predicting a total of approximately 0.51 million units, slightly below the company's target of 0.515 million units. It is also expected that Tesla's total deliveries in 2024 will be around 1.8 million units, level with 2023, indicating that Tesla's growth may be stagnating.

In particular, sales in major markets are declining. According to estimates from Cox Automotive, Tesla's sales in the USA are expected to drop by about 6% in 2024 to reach 0.633 million units, accounting for 4% of the entire Auto market. Sales in the EU and China markets are also expected to decline.

III. Market Share Faces Challenges

As Other Auto Manufacturers roll out more electric vehicle models, Tesla is inevitably losing some market share. It faces competition from BYD in China, challenges from Volkswagen and BMW in Europe, and competitors like General Motors and Ford in the USA.

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 grew by 25% year-on-year as of November, but Tesla's sales are decreasing.

4. The introduction of new models is slow, and the implementation of Self-Driving Cars still requires some time.

Since launching the Model Y in 2020, Tesla has not introduced any new models apart from the Cybertruck. While investors are optimistic about a potential $25,000 Low Stock Price model from Tesla, the company has not yet showcased a prototype or provided more related information.

Investors have high expectations regarding Tesla's progress in the Self-Driving Cars arena, while most Analysts believe that the widespread use of self-driving taxis will still take several years.

Tesla faces challenges such as declining sales and intensified market competition, yet 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 balances his multiple roles will be significant factors affecting Tesla's development.