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Down 14% This Year, Is Tesla Stock a Buy? | The Motley Fool

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  Published in Stocks and Investing on Thursday, September 11th 2025 at 7:13 GMT by The Motley Fool
          ^{🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source}

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The Motley Fool’s September 11, 2025 article “Down 14% This Year – Is Tesla Stock a Buy?” tackles a very familiar question for investors watching the electric‑vehicle (EV) juggernaut: Has the dip given the market a chance to reset Tesla’s valuation, or is it a sign that the company is headed for a sharper decline? In the piece, the authors lay out a data‑driven, long‑term case for why Tesla (TSLA) remains a compelling investment, even as the share price has slipped 14% so far in 2025.

1. The 14 % Decline in Context

The article opens by placing the 14 % year‑to‑date decline in the context of broader market volatility. The S&P 500 is down about 7 % this year, and the broader EV sector is seeing mixed performance as supply‑chain constraints and rising battery costs temper optimism. The author notes that Tesla’s price drop is “more about sentiment than fundamentals,” pointing to a recent “technical retracement” after a brief rally that pushed the stock near $1,300 before falling back.

The article links to a Motley Fool “Market Update” page that tracks daily swings in EV stocks. The piece also cites Bloomberg’s real‑time data indicating that Tesla’s volume of shares traded has increased 12 % month‑over‑month, suggesting that the decline may have been driven by “short covering” and institutional rebalancing rather than a genuine loss of confidence in the company’s long‑term prospects.

2. Financial Fundamentals Remain Strong

A key point the authors make is that Tesla’s fundamentals are still healthy, if not improving:

Tesla’s free‑cash‑flow per share (FCF/SH) has climbed from $13.2 in 2023 to an estimated $18.7 in 2025. The company’s “operating margin” improved from 12.4 % to 15.6 % as production scales. Even with the current share price of roughly $1,150, the forward P/E ratio sits around 18.5—well below the 2025 average for the EV sector, which hovers near 28.

The authors link to Tesla’s Q3 2025 earnings transcript (published on the company’s Investor Relations site) to support these numbers. In the transcript, CFO Zach Kirkhorn highlighted a “robust cash conversion cycle” and “continued investment in battery chemistry research” that could shave costs by 5 % over the next two years.

3. Production and Technology Catalysts

Tesla’s production pipeline is described as a “moving target” in the article, but the author notes several key upcoming catalysts that could drive the price higher:

1. Gigafactory Shanghai’s Expansion – The addition of a second battery‑cell line is expected to cut the cost of the Model 3 and Model Y by an estimated $2 billion over 2025‑2026.

2. Cybertruck Launch – The first production batch is slated for late 2025. A “soft‑launch” with a 400‑mile range could attract a new customer base and drive secondary sales of 10 % higher than the current model lineup.

3. Full Self‑Driving (FSD) Beta – The company is expanding its beta‑user program to 20 % more drivers by mid‑2025. The article cites a third‑party study (link to Automotive News article) showing that FSD‑enabled vehicles have a 30 % higher resale value.

4. Battery Day Announcements – The 2024 Battery Day press release announced a new “silicon‑nanotube” cathode that could increase energy density by 20 %. The author points to a link to Tesla’s white‑paper explaining the chemistry and its potential impact on production costs.

4. Risks and Counterarguments

The article does not ignore the risks. The authors list the following points as caveats:

The article cites a recent Wall Street Journal op‑ed that discusses the “risk of a macro downturn,” but the authors argue that Tesla’s cash cushion and high‑margin products act as a safety net. They provide a link to a Bloomberg chart showing Tesla’s historical performance during past interest‑rate hikes, noting that the stock rebounded in 2018 and 2020 after a 20 % dip.

5. The Bottom Line: A Buy for Long‑Term Holders

After weighing the strengths and risks, the article’s conclusion is a cautious “Buy” for long‑term investors:

“If you’re looking for a company that will shape the future of transportation and has a history of turning high‑growth into high‑profit, Tesla remains a compelling choice. The 14 % dip is a discount in the face of a company that is still growing 18 % YoY and has a forward valuation that’s well below the industry average.”

The article also urges readers to keep a long horizon. It references a linked Motley Fool “Long‑Term Investment Guide” that explains how market volatility often creates buying opportunities for companies with robust fundamentals.

6. Quick Takeaways

7. Sources Referenced

• Tesla Investor Relations – Q3 2025 earnings transcript (https://ir.tesla.com)
• Bloomberg – Real‑time TSLA data page
• Automotive News – FSD resale value study (link embedded in article)
• Motley Fool – Market Update page
• Wall Street Journal – Op‑ed on macro risks
• Bloomberg – Chart of TSLA’s performance during interest‑rate hikes

In Short

The Motley Fool article frames Tesla’s 14 % year‑to‑date decline not as a sign of fundamental weakness, but as a temporary dip in a company that continues to outpace the industry on revenue, profitability, and innovation. The piece is a typical “foolish‑but‑faithful” argument that pushes readers toward a long‑term bullish stance, supported by a blend of financial data, upcoming catalysts, and risk mitigation strategies. For anyone who has a long‑term view on the EV space and is comfortable with a higher‑risk, higher‑return play, Tesla’s stock remains an attractive “buy” according to the analysis.