Tesla (TSLA +0.96%) stock has been in freefall, and that accelerated today. Shares of the electric vehicle (EV) leader are now lower by more than 15% so far this year. As of 1:40 p.m. ET, Tesla shares were down by 5.3% on the day.
The recent decline comes as CEO Elon Musk has stayed in the spotlight more for his work in Washington, D.C., than at Tesla headquarters. But today's share decline comes from a combination of reasons.
NASDAQ: TSLA
Key Data Points
Chinese competition increases
Investors received news of what could be yet another distraction for Musk from his work at Tesla. The Tesla CEO is leading a group proposing to buy artificial intelligence (AI) developer OpenAI. Musk was one of OpenAI's founders but has more recently been feuding with Sam Altman. Altman is another of the company's founders and remains its CEO. Musk's $97.4 billion bid for the company was met with defiance from Altman.
It pales in comparison to the $300 billion valuation that a new $40 billion funding round reportedly led by Softbank Group would imply. Musk's offer is being viewed as the opening salvo in a new battle with Altman as he seeks to reset OpenAI into a for-profit company. And Tesla investors just see it as another distraction for Musk.
As if that weren't enough to fuel the Tesla bears, Chinese rival BYD also released news that could hurt Tesla's EV sales. BYD introduced its driver assistance system yesterday, making it available on most of its models, including its low-cost EVs priced below the equivalent of $10,000.
BYD said its driver assist system will use DeepSeek's AI. This comes with Tesla still working to get approval from China's regulators for a driver-supervised version of its autonomous driving software.
With the Tesla CEO busy with multiple other ventures and its largest global rival moving forward with its AI-based technology, Tesla stock is taking a hit today. Some may view the decline as an opportunity should Tesla release a fully autonomous vehicle this year. But for now, the freefall in Tesla shares continues.
