What happened

Shares of Tesla (NASDAQ:TSLA) fell on Friday, extending a brutal decline in the electric vehicle maker's stock price since it hit new highs in late January. By the close of trading, Tesla's stock price was down 4% after falling as much as 13% earlier in the day.

So what 

Buoyed by optimism about its leadership within the fast-growing EV market and potential within the renewable energy industry, Tesla's shares soared to a record high of $900.40 on Jan. 25. Yet since that time, the stock has plunged roughly 33%. Tesla's market capitalization, in turn, has fallen from $864 billion to $574 billion during that time. 

A downwardly sloping stock chart.

Tesla has lost a third of its value in recent weeks. Image source: Getty Images.

Concerns regarding intensifying competition are growing among investors. NIO, Li Motors, and XPeng are nipping away at Tesla's EV market share in China. At the same time, Ford Motor is wrestling away share from Tesla in the U.S. with its new Mustang Mach-E, according to Morgan Stanley.  

Meanwhile, longtime Tesla bulls are taking profits. Billionaire fund manager Ron Baron told CNBC that his firm, Baron Capital, sold 1.8 million shares of Tesla in recent months for "risk mitigation" purposes. The sales come despite Baron's calls for Tesla's stock price to reach $2,000 within the next decade. 

Now what 

These extreme moves in Tesla's share price show just how difficult it can be to determine the value of a business that competes in a dynamic new industry. With analysts and investors likely to struggle with their attempts to accurately value Tesla's stock for the foreseeable future, shareholders should brace themselves for continued volatility. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.