Tesla Stock Just Had Its Worst Day in Years. Is It Time to Buy the Dip?

Tesla (TSLA) stock took a significant hit on Monday, March 10, plummeting more than 15.4% in what turned out to be its worst trading day in years. The selloff follows mounting fears of a potential recession, fueled by concerns over President Donald Trump’s tariff policies, a price target cut from a Wall Street analyst, and disappointing sales figures from key international markets like Europe and China. Adding to the concerns, CEO Elon Musk’s association with the Trump administration appears to be weighing on Tesla’s brand perception, further unsettling investors.

Year-to-date, Tesla’s stock has plummeted by more than 42% and corrected by more than 50% from its peak of $488.54 in December 2024. This sharp decline raises the question of whether more pain lies ahead or if this significant pullback presents a buying opportunity.

The bearish case for Tesla is hard to ignore. Demand for its vehicles appears to be slowing, competition is rising in the electric vehicle (EV) space, and broader macroeconomic uncertainty continues to cast a shadow over the market.

However, the stock’s recent sharp decline has also eased concerns over its valuation, representing a more attractive entry point for long-term investors. Additionally, with several key catalysts on the horizon — ranging from upcoming vehicle launches to advancements in artificial intelligence (AI), the much-anticipated robotaxi rollout, and even progress in humanoid robotics — this pullback could set the stage for a significant rebound. Let’s take a closer look at TSLA stock.

Short-Term Headwinds to Keep TSLA Stock Volatile

Tesla is facing a tough road ahead as it navigates a challenging market environment. The EV giant is dealing with slowing demand, intensifying competition, and increasing pressure on its profit margins. In response, the company has doubled down on financing and leasing programs to keep sales momentum strong and maintain its competitive position. However, these efforts come at a cost — tighter automotive margins, which are impacting its profitability and reducing its margin gap with peers.

Notably, Tesla’s superior margins have led the company to command a premium valuation over peers. All these factors mean Tesla stock could remain volatile in the coming months.

Tesla’s Long-Term Growth Story Remains Compelling

Despite near-term headwinds, Tesla’s long-term outlook remains solid, driven by its commitment to innovation across multiple high-growth sectors such as artificial intelligence (AI), Full Self-Driving (FSD) technology, and robotics. Moreover, the launch of an affordable model will further accelerate its growth.

The launch of Tesla’s affordable EV model, still promised for the first half of the year, could give its volumes a much-needed boost, expand its total addressable market, and reignite sales momentum. This move will help Tesla maintain its leadership in the EV space while competing more effectively.

Beyond its core vehicle lineup, Tesla’s advancements in FSD technology present a major growth opportunity. The company plans to roll out supervised FSD in Europe and China by 2025, aiming to achieve full autonomy. A potential shift in U.S. regulations, supported by Elon Musk’s political connections, could further expedite FSD adoption across North America. During Tesla’s recent Q4 earnings call, Musk expressed confidence that widespread FSD adoption in the U.S. could happen as early as next year, which would further solidify Tesla’s leadership in the autonomous driving space. Additionally, Tesla’s much-anticipated Robotaxi service is on track for an initial launch in select U.S. markets later this year, potentially unlocking a significant new revenue stream.

Beyond transportation, Tesla’s foray into humanoid robotics with the Optimus project is poised to revolutionize labor efficiency. With initial deliveries expected by the second half of 2026, Optimus could open new growth avenues.

Another growth catalyst in Tesla’s portfolio is its energy segment, which continues to gain momentum. The company is witnessing solid growth and generating strong profitability from the segment. This growth in energy solutions further enhances Tesla’s long-term profitability and will support its share price.

Tesla’s Cost Optimization Efforts Are Paying Off

Tesla’s ongoing cost-cutting efforts are another reason to be optimistic about its long-term prospects. By improving raw material sourcing and enhancing manufacturing efficiencies, the company has reduced its cost per vehicle to below $35,000. These measures are helping Tesla absorb the financial strain of its aggressive financing and leasing programs while ensuring sustainable profitability.

TSLA Stock Outlook: Short-Term Volatility, Long-Term Potential

While Tesla stock may continue to experience near-term turbulence due to macroeconomic uncertainties and competitive pressures, its long-term investment appeal remains intact. The company’s leadership in EV and focus on AI, autonomous driving, robotics, and energy solutions positions it for sustained growth in the years ahead.

Wall Street maintains a “Hold” rating on TSLA stock, reflecting caution in the near term. However, Tesla stock has witnessed a significant correction, presenting a compelling buying opportunity for long-term investors.

With its ability to disrupt multiple industries beyond automotive manufacturing, Tesla is far more than just an EV company. It has the potential to redefine transportation, automation, and energy sectors.

On the date of publication, Amit Singh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.