Tesla (TSLA) experienced a sharp decline in its stock price on Monday, falling more than 15% to its lowest point since before the 2024 U.S. presidential election. This marks a significant drop of over 50% from its peak closing price of $479, reached in December 2021, and represents the worst day for Tesla shares since September 2020.

The slide in Tesla's stock came after analysts at UBS issued a bearish note, lowering their price target for the electric vehicle maker from $259 to $225. The downgrade was based on anticipated weaker delivery numbers for the first quarter, attributed to reduced demand for Tesla’s Model 3 and Model Y vehicles. UBS has revised its delivery estimate for Q1 to 367,000 vehicles, down from an earlier placeholder figure of 437,000 following Tesla’s fourth-quarter results.

UBS analysts also highlighted that their research shows faster delivery times for both the Model 3 and Model Y in key markets, which they interpret as a signal of lower demand. They also forecast a 5% drop in deliveries compared to last year, with a substantial 26% decline from the previous quarter.

Further pressuring Tesla stock, reports from February revealed a 49% plunge in Tesla’s shipments in China, marking the lowest level in nearly three years. This was seen as a troubling sign for the company’s global operations, especially as China remains one of Tesla's most important markets.

Despite the negative outlook, some of Tesla’s most prominent supporters have remained optimistic. Wedbush analyst Dan Ives reiterated his positive stance, calling the recent stock slump a "gut check moment" for Tesla’s investors. Ives doubled down on his Outperform rating and $550 price target, emphasizing that Tesla has faced significant market pullbacks before, which have often preceded stronger recoveries. He placed Tesla on the firm's "Best Ideas List," noting that the company’s disruptive potential in the tech and automotive sectors remains strong.

Similarly, Morgan Stanley analyst Adam Jonas expressed confidence in Tesla’s future, projecting the stock to reach $430, citing the company’s potential in artificial intelligence and robotics. Jonas highlighted Tesla’s ongoing transition from a purely automotive company to a diversified player in high-tech industries, including AI, as a key driver for long-term growth. He also pointed out that while Tesla’s deliveries may experience short-term challenges, these could create an attractive entry point for investors.

While Tesla continues to face headwinds, including increased competition in the electric vehicle market and growing political tensions surrounding CEO Elon Musk, there is still belief among certain analysts that the company’s future remains bright. Musk's involvement in politics, particularly as a prominent supporter of former President Donald Trump, has led to some backlash, particularly in Europe, where Tesla’s sales have reportedly been affected.

As the company prepares to release its first-quarter results on April 22, investors will be closely monitoring whether Tesla can overcome these challenges and continue to grow in both the automotive and tech sectors.