4 Tesla Stock Mistakes That Cost Investors Thousands
Written by
Vance Cariaga
Edited by
Jenna Klaverweiden
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Telsa’s (TSLA) stock price has defied conventional wisdom in 2025 by overcoming a host of challenges to move into positive territory. The electric vehicle (EV) maker’s shares closed at $438.97 on Oct. 22 and are up about 13% year to date. That’s quite a feat, considering that in early April the stock was down more than 40% for the year after hitting a 2025 closing low of $221.86.
Tesla’s problems include declining sales and profits, issues with its self-driving technology, and blowback from CEO Elon Musk’s role as head of the Department of Government Efficiency, a federal budget-slashing organization he has since left.
Despite those headwinds, Tesla shares have enjoyed a recent surge along with the broader stock market. That doesn’t mean you should jump into the stock with blinders on, however. Here are four Tesla stock mistakes that could cost investors thousands of dollars.
Not Accounting for Volatility
All stocks go through periods of ups and downs, but things can get pretty extreme with Tesla. Investors who bailed on the stock during one of its sharp downturns left thousands of dollars on the table when Tesla rallied again.
“If you’re betting on Elon, you’re betting on a guy who’s delivered moonshots before, but you’re also signing up for turbulence. That’s just the trade-off,” said Edward Corona, a Florida-based trader and publisher of The Options Oracle Newsletter.
Underestimating the Competition
Tesla might be the best-known EV company in the world, but it no longer ranks as the biggest. That title now belongs to China-based BYD, according to The Motley Fool. Tesla also faces increasing competition from traditional automakers like Ford and General Motors.
One mistake many investors make is believing that Tesla will be able to ward off rivals based solely on its brand recognition and first-mover status. In fact, the company is losing market share in numerous markets — and many investors have lost money as well.
Not Understanding Tesla’s Core Business
This is a common mistake. Even though Tesla is best known for its EVs, much of its stock value is based on other businesses. As Corona told GOBankingRates, a lot depends on “whether you think Tesla is a car company, a tech company or something else entirely.”
For now, EV sales provide the lion’s share of business. Tesla posted over $16 billion in total automotive revenues during its 2025 second quarter, according to a press release. That was down slightly from the previous year.
The other business segments — energy generation/storage and other services — combined to produce nearly $5.8 billion in revenue.
Based on its financial performance, Tesla’s high stock price is based more on its future potential as a tech firm than its current performance as a car company, experts say.
The mistake comes when you overestimate that potential. If Tesla fails to deliver on its technology, then the stock could take a beating that could cost you a lot of money.
Misjudging Investor Sentiment
If you invest in Tesla solely based on its business fundamentals, then you might be at a point where you want to sell the stock. But that could cost you thousands in future price growth.
One mistake investors make is assuming that when a stock price deviates from its “sensible” value, it will eventually revert back to that value, according to a recent article from Seeking Alpha.
“This is a fatal mistake because the stock prices are never formed on the basis of a sober and balanced assessment of the fundamentals,” Seeking Alpha noted.
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