Tesla's sharpest stock drop in months puts it back in the red for the year

By William Gavin

The Elon Musk-led company recently said it would recall some residential energy products

Elon Musk's Tesla is now the only "Magnificent Seven" stock in negative territory for 2025.

Tesla Inc.'s stock is now in negative territory on the year after it booked its worst daily drop since July.

Tesla shares (TSLA) ended Thursday down 6.6%, making them the ninth-worst performer in the S&P 500 SPX and the second-worst performer in the Nasdaq-100 index NDX on the day, according to Dow Jones Market Data. The stock also saw heavy trading volume, as it was the third-most active stock in the S&P 500 and the second-most active in the Nasdaq-100.

Thursday's fall was Tesla's largest one-day percentage decline since its 8.2% drop on July 24 - the session after the company reported second-quarter earnings, at which point Chief Executive Elon Musk told investors at least nine times that future quarters would be "rough."

The company has won more favor with investors since then, but the last few sessions have been painful. Tesla shares are in the midst of a three-day slide that has seen them lose 9.7%, their worst three-day stretch since June 6, when they fell 14.3%.

The stock is now down 0.5% on the year, making it the only "Magnificent Seven" name in the red so far for 2025. Tesla had been in the black since Sept. 12, when Musk purchased $1 billion worth of shares.

There's been some bad news for Tesla in recent days - including over the weekend, when the employees who managed Tesla's Cybertruck, Model 3 and Model Y programs announced their departure.

Major Tesla bull Cathie Wood's Ark Investment Management has trimmed its holdings in the company over the past several trading sessions. On Wednesday, the investment firm's ARK Next Generation Internet ARKW and ARK Innovation ARKK exchange-traded funds sold more than 70,000 Tesla shares, according to a disclosure filing. Tesla is still the top holding in those tech-heavy ETFs.

The company has also been struggling in China, the world's biggest market for electric vehicles. Between January and October, Tesla sold just 667,861 vehicles made in China, a 10% decline compared to a year earlier, according to Chinese Passenger Car Association data released this week.

And on Thursday, Tesla said it would recall about 10,500 residential energy products after receiving 22 reports complaining about the units overheating, including five reports that mentioned fires. The affected units were sold between November 2020 and December 2022.

Tesla issued a similar recall in September for Australian customers, noting that the impacted units contained lithium-ion battery cells provided by a third-party supplier. According to the Australian Competition and Consumer Commission, Tesla had received reports that Powerwall 2 units were "smoking or emitting flames."

-William Gavin

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11-13-25 1704ET