Tesla stock trades at $297 as Musk political pivot and BYD competition cloud rally
Tesla continues to face intensified competition, especially from Chinese EV manufacturers
Tesla Inc. (NASDAQ: TSLA) shares have come under renewed selling pressure, recently trading around $297.81 as of July 9, 2025, reflecting a broader breakdown in technical structure.
Highlights
- Tesla is trading at $297.81, showing a slight rebound but still technically weak after breaching key support levels.
- Elon Musk’s political activity and leadership distractions are raising investor concerns about governance and focus.
- Strong competition from BYD and delays in new product rollouts add to the bearish short-term outlook.
The stock has slipped over 7% in just the past week and broken below several key support levels. Most notably, it has breached the $285 zone, a level that had provided multiple bounces in May and early June. The next support to watch lies at $265, which coincides with the lower bound of the long-term ascending channel that had supported the stock since early 2024.
The Relative Strength Index (RSI) has plunged below 40, indicating weakening bullish momentum and potential for further downside. This comes after the stock failed to hold above the 50-day moving average at $312 and quickly slipped below the 200-day moving average at $305. These technical signals, along with the formation of a “death cross” — where the 50-day MA crosses below the 200-day MA — reinforce a bearish short-term outlook.
Tesla stock price dynamics (May 2025 - July 2025). Source: TradingView
Volume on recent down days has also been elevated, suggesting that institutional investors may be rotating out of TSLA. Furthermore, Tesla has broken down from a bearish flag formation that had been developing since mid-June. The flag pattern breakdown signals a potential measured move toward the $225-$230 area over the coming weeks if downside momentum persists.
Market context: political risk and competitive headwinds
Beyond technicals, broader market context is playing a critical role in Tesla’s current slump. A recent article on Investor’s Business Daily highlighted growing concern among analysts and investors regarding Elon Musk’s increasing involvement in U.S. politics. Musk's announcement of a new political entity, the “America Party,” has drawn criticism and injected volatility into Tesla’s stock. His escalating public feud with President Donald Trump has also become a distraction, raising questions about governance and the board’s ability to manage leadership risk.
There is growing sentiment that Musk’s political ambitions and controversial statements could alienate a segment of Tesla’s consumer base and provoke regulatory scrutiny. This concern has led some institutional investors to call for more oversight from Tesla’s board, including the possibility of separating Musk’s political endeavors from his executive responsibilities.
Meanwhile, Tesla continues to face intensified competition, especially from Chinese EV manufacturers. BYD, for example, reported delivering 1.1 million vehicles in Q2 2025, substantially ahead of Tesla’s 384,122 deliveries. BYD’s ability to rapidly innovate — introducing models with five-minute charging and in-house developed autonomous driving features — has made it an increasingly formidable player in the global EV race.
Risk skewed to the downside
Given the confluence of technical weakness, growing political distractions, and intensifying competitive threats, Tesla’s short-term price outlook remains bearish. If the current downtrend continues and the stock fails to hold the $265 support zone, the next downside target lies near $225, a level last seen during the March-April 2025 lows. That would represent a roughly 25% correction from the recent highs.
On the upside, any recovery attempt would need to reclaim the $305 level and hold above the 50-day moving average to have a chance of invalidating the bearish thesis. Further resistance lies at $318 and then at $365, which marks the upper boundary of the recent trading range. However, without a fundamental catalyst such as a positive earnings surprise or stabilization in Musk’s public persona, upside momentum appears limited in the near term.
Tesla's recent stock rally on news of its robotaxi launch in Austin quickly reversed as investors grew wary of its scalability and real-world viability. Ongoing doubts about future vehicle sales, autonomous driving promises, and regulatory hurdles continue to dampen sentiment.
