Tesla Stock Slides After Hyped Reveal Falls Flat

Tesla (TSLA) shares fell in Tuesday morning trading after an initial surge fueled by cryptic social media teasers gave way to a less-than-thrilling product reveal: a stripped-down and more affordable version of the company’s popular Model Y SUV.

Tesla Stock Slides

The electric vehicle maker’s stock had rallied more than 5.4% by Monday’s close after Tesla posted a series of mysterious GIFs on X (formerly Twitter) over the weekend. The posts — featuring a spinning Tesla logo with the date “10/7” and headlights cutting through smoke — sparked speculation about a major new launch.

However, investor enthusiasm cooled quickly once the announcement was made. Shares slipped more than 1% in the first hour of trading Tuesday as Tesla revealed that the teased product is essentially a budget-friendly Model Y with fewer features and lower-cost materials. According to a Bloomberg report, the pared-down version is designed to offset the loss of up to $7,500 in federal tax credits.

This marks Tesla’s first significant product release since October 2024, when it debuted its self-driving “Robotaxi.” While the new Model Y may expand the company’s market reach, the reveal lacked the wow factor many investors were hoping for.

The launch comes on the heels of encouraging news for the EV giant. Tesla reported on October 2 that its vehicle deliveries for the third quarter jumped 7% year-over-year, beating Wall Street expectations. Analysts believe the delivery surge was partly driven by the expiration of the federal EV tax credit at the end of September — a boost that also benefited rivals like Rivian (RIVN).

Despite the recent uptick, Tesla’s deliveries struggled earlier in 2025, declining about 13% in both the first and second quarters. Analysts attributed the slowdown to CEO Elon Musk’s political entanglements in Washington, where he spent much of the year engaged in on-and-off negotiations with the Trump administration.

Investors will be watching closely for Tesla’s next moves as the company gears up to report earnings on October 22, followed by its annual shareholder meeting on November 6. With market expectations running high, the new Model Y’s reception could prove pivotal for the company’s momentum heading into the final stretch of the year.