Tesla Inc. has seen a dramatic shift in sentiment on Wall Street, from being a popular trade to now being largely disliked. This week, Tesla faced more challenges as a Chinese competitor surpassed the company in electric vehicle (EV) innovation, a field traditionally associated with Tesla's CEO Elon Musk. Tesla's stock dropped 5.3% on Tuesday, while rival BYD Co. reached a record high after introducing an electric vehicle that can charge rapidly, similar to refueling a gas vehicle.

Analysts express concerns about Tesla's ability to innovate continuously and outpace competitors, which is crucial given its high valuation. Recent reports of declining sales of Tesla's electric cars in key markets have further worsened investor sentiment. Additionally, Elon Musk's increased involvement in political issues, which was expected to benefit Tesla, has become a concern for shareholders.

Investors are apprehensive about Tesla's performance, especially because its stock is the worst performer on the S&P 500 Index this year, declining over 44% since December. BYD's progress has heightened these worries, particularly regarding challenges like range-anxiety and lengthy charging times in the EV market. Analysts have revised their price targets for Tesla due to concerns about sales in various regions and expectations of lower market share in China and Europe.

Elon Musk's declining popularity, both among enthusiasts and investors, has further clouded Tesla's prospects. Some on Wall Street are worried that Musk's involvement in political controversies may have a negative impact on the brand and suggest that his focus may have shifted away from effectively managing the car company.