Should you sell or hold Tesla shares in 2025?

In early 2025, Tesla remains at the centre of both market news and media coverage. The company is navigating a delicate phase: it still enjoys exceptional visibility, yet this exposure now comes with growing polarisation around Elon Musk. The CEO’s political statements, together with his highly publicised technological ambitions, continue to fuel debate about Tesla’s actual ability to deliver on its objectives.

So, should investors continue to believe in Tesla’s potential, or start reducing their exposure?

Tesla’s brand under political pressure

Elon Musk’s alignment with Donald Trump’s political agenda, along with recent staged appearances such as Tesla vehicles displayed in front of the White House, has strengthened the perception of the company as a “symbol” associated with a conservative movement. While this may have aimed to reassure markets, it has mainly created discomfort among many long-standing Tesla owners, who often identify with environmental values. In an international context where climate issues are increasingly politicised, Tesla risks losing appeal among liberal-leaning customers, while Trump supporters remain generally reluctant to adopt electric vehicles en masse. This disconnect weakens demand and reinforces the impression that the stock has become overly dependent on Musk’s image.

How Tesla’s share price has evolved

Below is the evolution of Tesla’s share price over the past 12 months. The table highlights recent trends with a clear indication of monthly rises and declines.

An ongoing debate over Tesla’s fair value

Financial indicators show that many investors still believe Tesla’s market capitalisation remains too high for what they consider “just” a car manufacturer. Several investment banks are anticipating a potential correction should sales momentum or public sentiment deteriorate further. While announcements related to autonomous driving and robotics remain promising, they have yet to generate the level of profits required to justify such a valuation.

Some investors also fear that in seeking government incentives or contracts, Tesla could further expose its brand to political controversy. Ultimately, the balance will depend on the company’s ability to turn its technological advances into tangible results while maintaining a reputation for innovation and reliability.

Also worth reading: Tesla or BYD: Which stock is more promising for investment?

Increasing competition and weakening demand

The global EV market is tightening. Legacy manufacturers such as Ford, Volkswagen and Toyota have significantly accelerated their investments, while Asian groups – especially BYD – continue to gain market share thanks to aggressive pricing and more flexible production. At the same time, technology companies like Alphabet’s Waymo are advancing rapidly in autonomous driving. This growing pressure forces Tesla to maintain a very high pace of innovation in order to preserve its position as a benchmark in electric mobility.

Should you sell or hold in 2025?

The answer largely depends on each investor’s profile. Those who expect major future breakthroughs – advanced autonomous driving, or new public partnerships – might choose to hold their shares, convinced that Tesla will regain momentum. Conversely, shareholders worried about prolonged brand deterioration or slowing deliveries in a more competitive market may prefer to take profits or reduce exposure.

Monitoring quarterly demand trends, margins and Tesla’s ability to maintain growth outside the United States will be essential. The months ahead will be crucial in assessing how government policy and Musk’s strategy will shape long-term performance.