Tesla Is Plummeting Again -- Is It Time to Buy the Stock?

On the heels of huge gains yesterday, Tesla (NASDAQ: TSLA) stock is seeing big sell-offs in Thursday's trading. The electric-vehicle (EV) company's share price was down 9.9% as of 1:15 p.m. ET amid the backdrop of a 5.3% decline for the S&P 500 (SNPINDEX: ^GSPC) and a 6.1% decline for the Nasdaq Composite (NASDAQINDEX: ^IXIC).

While President Donald Trump issued a 90-day suspension of reciprocal tariffs for other countries yesterday, he announced that the import tax rate on products from China would be raised from 104% to 145%. The previous tariff rate was already extremely high, and the move to raise import taxes on China even higher is highlighting rapidly deteriorating relations with the U.S. and the potential for conditions to continue worsening. As of this writing, Tesla stock is now down 39% across 2025's trading and 48% from its valuation peak.

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Is Tesla stock a buy right now?

Despite a big valuation pullback, Tesla stock is still trading at approximately 95.5 times this year's expected earnings and 7.4 times this year's expected sales. Given relatively weak performance for the business recently and concerns that the company's brand may have been significantly damaged by CEO Elon Musk's foray into politics, the company's valuation multiples suggest that the stock is still very risky.

While the launch of a new vehicle model sometime this quarter could provide a significant positive sales catalyst, Tesla stock still looks too expensive if you're valuing the company primarily based on the core EV business. On the other hand, the auto specialist is in the early stages of rolling out its self-driving robotaxi business -- and robotics projects could be a meaningful growth driver further out. The robotaxi service could become a powerful earnings driver for Tesla, but it doesn't make sense to buy the stock if you don't think the company will score big wins on that front.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.