Elon Musk’s Recent Tesla Stock Buy Faces Losses Amid Market Slide

Elon Musk’s recent $1 billion personal investment in Tesla stock (NYSE: TSLA) is currently facing the prospect of being “underwater,” meaning the value of the shares has dropped below his purchase price. The paper loss comes as Tesla’s stock has experienced a sharp sell-off, raising concerns among investors and casting a temporary shadow over the CEO’s highly publicized vote of confidence in his own company.

Musk Bought Tesla Shares in September

Musk purchased approximately $1 billion worth of Tesla shares on the open market on September 12, 2025. This move, his first open-market purchase since 2020, was widely interpreted as a powerful endorsement of Tesla’s future at a time when the company was dealing with market pressures and a highly scrutinized $1 trillion compensation package proposal.

News of the purchase initially provided a healthy boost to the stock, which surged in the following weeks, reaching highs well above Musk’s average buy-in price. However, the recent dramatic downturn in Tesla’s share price has wiped out those gains. The stock price fell below the crucial $389 mark in today’s price action, signaling that the initial $1 billion investment theoretically became a loss-making position.

Shareholders Approve Musk’s Compensation

Earlier this month, Tesla shareholders approved Musk’s $1 trillion compensation with an overwhelming majority, albeit a lower one than the previous one, which was struck down by a court.

The compensation would be awarded in a series of tranches, with each payout contingent on a combination of market capitalization and operational milestones. To receive any of the shares, Musk would need to remain with the company for at least 7.5 years, with the full package requiring a 10-year commitment.

Meanwhile, even if Tesla meets some of the easier targets, Musk could end up earning tens of billions of dollars. Musk incidentally does not get any salary or bonus at Tesla, and all his compensation is tied to stock awards.

Tesla is Witnessing a Slowdown in Its Core EV Business

The electric vehicle (EV) maker has been navigating what its CEO himself described as a “rough” environment, facing slowing sales growth and intensifying competition globally, particularly in China and Europe.

Tesla experienced a significant downturn in China in October 2025, with its domestic sales hitting their lowest level in three years. This slump comes as the EV market in China intensifies, with local manufacturers gaining substantial market share.

Tesla sold only 26,006 vehicles in China last month, a 35.8% year-on-year decline and a 63.6% drop from September’s sales, which were temporarily boosted by the delivery start of the new Model Y L. The initial excitement and sales spike from the launch of the six-seat, longer-wheelbase Model Y L in September appear to have quickly waned, contributing to the sharp month-over-month drop.

TSLA’s Market Share in the Chinese EV Market Plummeted in October

Tesla’s share of China’s New Energy Vehicle (NEV) market (which includes BEVs and PHEVs) shrank dramatically to just 2.03% in October, down from 8.7% in September and the lowest since August 2022. This caused Tesla to drop out of the top 10 NEV retail sales ranking for the first time in three years.

Despite the local slump, exports of China-made Teslas from the Shanghai Gigafactory rose to 35,491 units, a two-year high, suggesting a shift in allocation to overseas markets.

Meanwhile, Tesla’s sales in Europe continued to slide in October, and it marked one of the worst months for Tesla registrations in 2025, continuing a worrying two-year trend of declining demand across the continent.

Total Tesla registrations across Europe for the first ten months of the year are down over 30% compared to the same period in 2024.

BYD Outsold Tesla in Europe

While Tesla is facing a terrible slowdown in Europe, Chinese EV companies, particularly BYD, are fast gaining ground.

Tesla has been in Europe for quite some time now and even has a Gigafactory in Germany. BYD, on the other hand, officially entered the European market in 2022 and has outsold Tesla for three consecutive months, despite facing tariffs in the EU.

Notably, in 2011, Tesla CEO Elon Musk laughed at the possibility of BYD becoming a competitor to Tesla. However, the Chinese company has proven critics wrong and has emerged as a serious competitor to Tesla, not only in China but also in global markets.

BYD surpassed Tesla’s total sales in 2022, even as the US EV giant retained the title of the biggest seller of battery electric vehicles (BEVs). It hit yet another milestone when its 2024 revenues surpassed those of Tesla. BYD’s annual revenues rose 29% YoY to $107 billion last year, while Tesla’s revenues were around $97.7 billion. The steep rise in BYD’s sales was led by a record 4.27 million deliveries, which was well ahead of Tesla, which reported a YoY fall in its 2024 deliveries – the first in the company’s history. Tesla’s sales are down on a YoY basis in the first nine months of the year, and the company looks set to deliver another year of degrowth in 2025.

Musk Believes Tesla Could Be the World’s Most Valuable Company

While previously Musk said that Tesla would be more than the combined worth of Apple and Saudi Aramco, he has since been making even bolder predictions, and last year said that the company’s Optimus humanoid would make it a $25 trillion company. However, many Wall Street analysts don’t share Musk’s optimism and see the stock as highly overvalued.

Musk has tried to reposition Tesla as an AI play with products like robotaxis and Optimus. The annual shareholder meeting served as a pivot point, with Musk even talking about the possibility of Tesla setting up a chip manufacturing plant.

Tesla Is Betting on Cybercab to Revive Its Sales

The most ambitious product reveal at that event was the Cybercab, the fully autonomous robotaxi designed without a steering wheel, pedals, or side mirrors. Musk confirmed that mass production is scheduled to begin in April 2026 at Gigafactory Texas, with the staggering goal of achieving a 10-second cycle time per vehicle on the production line, six times faster than the Model Y. This manufacturing efficiency is intended to allow for an annual production capacity of up to 2-3 million units, which is central to Tesla’s objective of deploying 1 million robotaxis in commercial service as part of Musk’s long-term compensation milestones.