The Direxion Daily TSLA Bull 2X Shares (TSLL) experienced a dramatic 19.71% plunge in pre-market trading on Monday, reflecting the severe downturn in Tesla's stock amid a perfect storm of challenges. This leveraged ETF, which aims to deliver twice the daily performance of Tesla's stock, has been hit particularly hard by the automaker's recent woes.
The steep decline comes as Tesla grapples with multiple issues that have sent its stock tumbling. Wedbush Securities analyst Dan Ives, a longtime Tesla bull, slashed his price target for Tesla by 43%, from $550 to $315, citing a "double-whammy" of tariffs and brand issues. Ives estimates that Tesla may have already lost at least 10% of its future customer base globally due to self-created brand problems, largely stemming from CEO Elon Musk's controversial political involvement and his role in the Trump administration.
Adding to Tesla's troubles are disappointing first-quarter deliveries, which fell 13% year-over-year to just under 337,000 vehicles, marking the lowest delivery figure since 2022. This significant underperformance has raised concerns about Tesla's growth trajectory in the face of increasing competition. Furthermore, the impact of President Trump's newly announced global tariffs is expected to disrupt Tesla's supply chain and make it harder for the company to compete with Chinese EV manufacturers like BYD. The situation is exacerbated by China's retaliatory 34% tariff on all imported goods from the U.S., which could severely impact Tesla's position in this crucial market.
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