Tesla sparks concern with rare stock signal not seen in three years: 'The potential for future losses'

Tesla shares created a "death cross" a couple of weeks ago — another signal that the electric vehicle pioneer's best days may be behind it.

What's happening?

The financial term indicates "heightened volatility and the potential for future losses," Futurism reported. It is used "when a company's 50-day moving average crosses below its 200-day average."

Tesla stock last produced the death cross in May 2022. On April 14, the S&P 500 and Nasdaq 100 indexes also formed this pattern. Futurism cited President Donald Trump's tariff war.

The once-revered business ushered in the EV revolution with its all-electric offerings. But CEO Elon Musk's political involvement and increased market competition have led to poor sales and a bleak outlook.

"Brand issues would create permanent brand destruction," longtime Tesla investor and Wedbush Securities analyst Dan Ives said.

Why is this important?

"While there's no guarantee the carmaker's shares are about to crash — death crosses have also been known to lead to a quick rebound — the indicator has historically signaled rough days ahead," Futurism stated.

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Though the precipitous fall is not really related to the EV industry, it could impact the adoption of the clean vehicles, which are improving air quality and tempering rising global temperatures. EVs produce no tailpipe pollution — they don't even have tailpipes — and are cheaper to operate than gas-powered vehicles, with drivers saving $1,500 annually on fuel and maintenance.

What's being done about Tesla's downfall?

Musk has said the automaker will unveil an autonomous taxi by the end of the year, and Tesla's work on driver assistance technology as well as robotics could help it turn things around. Futurism also noted that tariffs have made the company's production costs soar and resulted in the suspension of shipping plans.

However, investors and observers are raising eyebrows about overly optimistic proclamations in the face of this decline and roadblocks posed by lawsuits and state policies.

Despite Tesla's spiral and legitimate but spurious concerns about EV battery mining, electric vehicle sales are growing in the United States and elsewhere.