I was wrong about the price of Tesla's shares!

If someone had invested £ 10,000 in Tesla (Nasdaq: Tsla) Actions in mid -December, now (April 7) would be worth £ 4,650. That is a loss of just over 53%.

On the contrary, even after the recent setback, the same amount invested last April would have increased by 64%.

And that was the point I was trying to do the last time I wrote about the Electric Vehicle (EV) company. I argued that the price of Tesla shares, in the last five years, has decreased and fluid. And despite the fact that the bubble after Trump could not be justified, I said there was no need to panic when the company's shares began to fall. I thought it was time to have a feeling of perspective.

And now …

However, this belief was challenged by two events last week. First, on April 2, the company reported a disappointing Q1 2025. Compared to the same period 12 months ago, deliveries were 13% lower to 336,681. It was the worst quarterly performance since spring of 2022.

Crucially, now it has been left behind Byd for the first time. And closer to home, sales are falling in many of its key European markets.

The second concern that I have, in common with many other investors, I am sure, is the impact of President Trump's decision to impose a 25% rate on imported cars to the United States.

In simple terms, this could be a good thing for Tesla. Undoubtedly, Americans will buy more of their (cheapest) 'own' cars. However, other governments are likely to retaliate. This should concern Tesla's shareholders because the company sells more cars abroad than in the United States.

As is usually the case with global supply chains, the situation is more complicated because the group has factories in Germany and China. These countries could be reluctant to penalize national production, despite expressing their horror for Trump's tariffs. But whatever they decide, I think a 'commercial war' is not in the long -term interests of anyone.

What now?

No one knows what will happen in the next few days and weeks, but even with the recent setback in the price of the shares, Tesla's actions are still expensive.

Looking at the profits adjusted by action in the last four quarters ($ 2.42), the action is now quoted 94 times the historical gains. But to be honest, this is largely irrelevant. In my opinion, using conventional valuation techniques, the company has always been overvalued.

However, they are still questions about whether the entrance of Elon Musk's policy has damaged the brand. Anecdotally, I suspect that it is likely that more Democrats buy EV than Republicans.

There are also reports that your support for Trump is the reason behind the fall of sales in Europe, although it is impossible to know with certainty. In my experience, some who claim to be boycotting a particular product or service were, conveniently, never buy in the first place.

But if it were a shareholder, I would worry that much of the valuation of Tesla seems to be built around its autonomous driving capabilities. It looks like a technological action instead of a car manufacturer. However, Byd gives a similar technology, including his 'eye of God' system, for free.

Although the company repeatedly demonstrates that its critics are wrong and that they have a very loyal customer base, I do not want to buy any Tesla action. There is too much uncertainty about the company so that I want to separate me from my cash.