Tesla stock (Nasdaq: TSLA) entered 2025 on the back foot, dipping nearly 7% in a week. Its price has fallen below the $400 mark and is attracting bearish sentiments in the indices. The fall in price comes even after Elon Musk’s closeness with President-elect Donald Trump and his getting a government position to manage the newly created Department of Government Efficiency (D.O.G.E) along with Republican leader Vivek Ramaswamy.
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After Trump reclaimed the White House in November last year, leading US stocks surged in value. TSLA stock went from a low of $242 to a high of $479 in just a month after Trump’s victory. However, things have now slowed down for Tesla stock as its price is moving in reverse gear. Investors remain skeptical about taking an entry position fearing that the stock is yet to bottom out in the charts.
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Why is Tesla Stock (TSLA) Falling in 2025?
Tesla stock is crashing in 2025 because the National Highway Traffic Safety Administration (NHTSA) opened a probe against the company, Reuters reported. The probe was launched to find out whether its vehicles were equipped with the “Actually Smart Summon” feature. The investigation stems from crashes being reported by owners as the vehicles failed to detect both moving and still objects.
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The probe has now been extended to its 2.6 million vehicles, and a report will be released after the investigation is complete. Reports of the vehicle crashing into moving cars, parked cars, and other obstacles have raised concerns about its safety features. This puts Tesla stock under pressure, making its price head south in the charts.
TSLA stock could remain under pressure until the NHTSA completes the probe and publishes the report. If the investigation shows that Tesla cars are not equipped with the safety features, the stock could plummet further. Its prospects now hang in the balance as a negative report might rattle investors, leading to another round of sell-offs.