Shares of Tesla (TSLA 4.88%) were hit hard on Wednesday. The stock fell 4.8% by the time the market closed.
The stock is likely down primarily because of a decline in the overall market that weighed particularly heavily on growth stocks like Tesla. However, shares may also be down because of a note from Morgan Stanley analyst Adam Jonas about Ford's new electric Mustang Mach-E taking market share from Tesla in February.
Jonas estimates that Tesla's market share of the EV market in the U.S. dropped from 81% in February of 2020 to 69% in February of 2021, largely due to market share gains from the new Mustang Mach-E.
Still, this doesn't mean Tesla's electric vehicle sales are faring poorly; the overall EV market grew 40% year over year during the period, Jonas estimates.
The main reason for the stock's decline, however, is likely a pullback in the overall market on Wednesday. The S&P 500 and Nasdaq Composite fell 1.3% and 2.7%, respectively. Many growth stocks like Tesla fell even more.
Tesla stock's decline adds to an overall downward trend for the stock in recent weeks. After shares rose to an all-time high of $900.40 earlier this year, the stock is now down 7% year to date, underperforming the S&P 500's 2% decline.
Investors should expect more volatility from Tesla shares, as growth stocks are typically much more volatile than the overall market.