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Elon Musk isn’t having a good month so far, despite the fact that he didn’t have a good March either.
Since April began, Tesla (TSLA) stock has been sharply trending downward, falling more than 18%. While the tech sector appeared to be rebounding for a few hours on April 8 following the recent selloff, TSLA is already back in the red, as are many of its peers.
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Most companies are facing a highly uncertain future right now as the threat posed by U.S. President Donald Trump’s tariffs continues to spark high economic uncertainty. However, the outlook is particularly grim for Tesla since the automaker recently reported Q1 deliveries and came in below Wall Street’s scaled-back estimates.
A recent announcement out of China, though, suggests that things are about to get much worse for Musk and Tesla.
A longtime threat to Tesla is becoming extremely formidable
It’s no secret that consumer sentiment toward Tesla has suffered recently, moving in the same direction as the company’s share price.
Protests have taken place across the U.S. and beyond, while others have resorted to vandalism in protest of Musk and his affiliation with the Department of Government Efficiency (DOGE).
Related: Key Tesla investor makes blunt prediction for the company's future
With its market share shrinking in both the U.S. and Europe, Tesla needs its Chinese consumer base more than ever if it wants to avoid further losses. Unfortunately, one of its competitors is making significant strides toward overtaking it as the global electric vehicle (EV) leader.
While Tesla stock has been trending downward over the past six months, Chinese automaker BYD (BYDDY) has been making slow but steady progress and is currently in the green. The company has outsold Tesla during the past two quarters, a feat it accomplished without access to the U.S. market.
Now, as Tesla stock continues to decline, BYD has an opportunity to start outshining it in the stock market as well.
Investor Ross Gerber recently implied that he thinks the TSLA can fall even further, predicting a 50% correction. If that happens, TSLA stock will end up trading at close to $100 per share, not much higher than BYD’s current price of $84.
“If BYD’s first-quarter net income comes in at the high end of its guidance, and Tesla earns only a hair less than estimates, BYD will make more money than Tesla,” Barron’s reports. “It will be another feather in the cap of the Chinese car company, and another warning for Musk’s EV maker.”