Will Tesla’s Stock Troubles Result In Cheaper Cars?

Even those who don’t follow car news in particular have been reading all about Tesla’s recent stock troubles. At last check, Tesla’s stock price was on a five-day freefall, and down by more than a third over the first few months of 2025. This despite cars like the Tesla Model Y selling more than 370,000 units to Americans in 2023.

The question is, what does this mean for car buyers? If you don’t really follow the stock market, it can all seem very abstract and it’s difficult to see how it connects to the actual long-term success of the business itself. More importantly for most of us, t’s difficult to see how it pertains to product pricing. That is, could these stock price troubles translate to cheaper Teslas for American buyers? Let’s find out…

What Is Going On With Tesla’s Stock Prices, Anyway?

As at the time of writing, Tesla stock has been losing value for five days straight. Tesla’s stock had a few excellent months at the end of 2024, so it would be incorrect to say TSLA is at an “all-time low” right now, but the stock has lost a lot of its value over January and February 2025.

There are a lot of dots that would be tempting to connect right now, but what we’re really looking at here is, for the most part, the natural ebb and flow of running a multinational business. A year ago, the European Automobile Manufacturers’ Association registered 18,161 Teslas in Europe. This January, they registered 9,945 Teslas, or around half as many units. For the most part, this comes down to the simple fact that Tesla has never had more competition overseas. Volkswagen, Renault, and China’s SAIC Motor have all had strong showings recently, and Tesla is suffering the losses that come with being an innovator in a segment as it becomes increasingly competitive.

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Whatever other factors may or may not be in play, the only thing we can really point to objectively at the moment is the fact that Tesla had a rough go of it in Europe last year. At the end of the day, the nature of the stock market means that investors will follow the money, and the money says that Tesla’s days as king of its segment are numbered. Simple as that.

Tesla Prices Have Already Been On The Decline

If you see Tesla slashing their MSRPs, it’s easy to assume that this is tied to the declining stock prices. But, Tesla’s been slashing prices for a while now. In an 11th-hour sprint to close a few more deals before the end of the year, the electric car company cut monthly leases by $50 for the rear-wheel Model Y last November, plus zero percent interest for “qualified buyers”.

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Last April, Tesla slashed prices for the Model S, Model X, and Model Y by $2,000 in the US, and we were already reading the writing on the wall back then, attributing these price cuts to Chinese competition. No doubt EV segment over-speculation has played its part in all of this, too. Last year was the year of EV backpedaling from many leading automakers.

In other words, while the TSLA stock is falling at the same time as Tesla sticker prices are coming down, that doesn’t necessarily mean that one led directly to the other.

How Exactly Do Stock Prices Affect Car Prices?

Correlation between stock prices and car prices is rarely as direct as you might think. Remember that TSLA actually jumped from a low of around $213 a share to a high of $479.86 from late October to mid-December last year. This would be around the same time Tesla was trying to pump up year-end sales numbers with all those signing deals. One might be able to argue that an increase in year-end sales contributed to a stock surge, but the sudden spike in stock prices didn’t result in higher MSRPs, and the sudden drop is unlikely to result in lower MSRPs.

In other words, car prices are only one of a thousand factors affecting stock prices, and stock prices don’t really have an immediate impact on car prices. What does happen from time to time is that car and stock prices are both affected by the same events. Back in 2009, when General Motors filed for bankruptcy and investors watched the value of their shares tick down to zero, car prices fell, as well. But this wasn’t a cause-and-effect between one and the other. Rather, both stemmed from the ongoing financial crisis at the time.

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So, GM stocks were at an all-time low, and GM cars like the Buick Enclave were going for cheap, too, but one couldn’t really be blamed on the other. Rather, both were a result of hard economic realities facing the nation at the end of the 2000s.

Likewise, you might see dealer markups on the rise when the stock market is at an all-time high, simply because investors will celebrate by cashing in a few chips and buying that Lexus RZ or BMW 3 Series they’ve had their eye on.

Don’t Hold Your Breath For Tesla Prices To Keep Falling

Falling stock prices could result in shareholders putting pressure on an automaker to improve their sales figures, and discounts could be an idea that’s floated around at meetings. But pricing isn’t really an issue for Tesla at the moment, and even steeper discounts would be unlikely to correct the stock price falloff. A new Model 3 goes for around $38,990 right now, before we take any credits or incentives into account. That’s well below the average new EV price of $55,614, according to Cox Automotive as of January 2025.

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Bottom line: if you’ve been holding off buying that new Model S because you want to see if Tesla’s stock woes will result in the automaker knocking another 10 percent off the sticker price, you’re going to be waiting for a long time. The price of any make and model will tend to keep declining over time as new models are introduced and dealers need to clear up space on the lot, but we’re unlikely to see any discounts being applied to current Teslas specifically because of TSLA’s falling value.

In other words, go ahead and buy that Tesla now, because it’s unlikely Tesla will try to fix their falling stock with any further discounts or price drops. If you’re only looking at the story from the perspective of a potential EV buyer, you don’t really need to worry about the stock market.

Sources: Yahoo!, Tesla, Forbes