Tesla has faced a tough week and an even tougher month. Shares dropped 1.2% early Friday, adding to a decline that has left the stock down 8.5% this week and 15% so far in June. This puts Tesla on track for its worst monthly performance since February 2025. The drop is due to a federal investigation into a fatal crash and a wider tech market pullback caused by rising memory chip prices. Here’s a look at what’s affecting the stock and whether things might improve soon.
Several federal agencies said this week they are looking into a Tesla Model 3 crash near Houston, where the car left the road, hit a house, and killed someone inside. The driver told police that Tesla’s automated driving system was on during the crash. However, Tesla’s vice president of AI and software posted on social media that the driver had pressed the accelerator manually, disputing claims that the car was fully autonomous. The investigations are still underway and pose a risk to Tesla’s reputation, especially since the company’s long-term value depends on delivering safe, scalable self-driving technology.
Broader market trends are also putting pressure on Tesla. Investors are pulling back from AI-related stocks because rising memory chip prices have raised doubts about how long the current wave of AI spending can last. Tesla is affected by this shift, since much of its high valuation comes from its plans for AI robotaxis and humanoid robots.
SpaceX shares have also fallen this week, adding more pressure on Elon Musk. The drop in both companies’ stocks has cost Musk the trillionaire status he briefly reached after SpaceX’s IPO earlier this month.
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