Review of Tesla’s Top 3 Gain and Loss Events Since 2020: Driving Logic Behind Volatility and What Insights Can We Gain?

TradingKey - Gain Clear Insights Tesla (TSLA) The fluctuations since 2020 help investors understand the volatility range of Tesla as a high-growth stock and effectively assist in risk mitigation for the subsequent market.

Tesla's Top 3 Gains Since 2020

As a high-growth tech giant, Tesla gained market favor in 2024 and 2025. As one of the most popular tech stocks, Tesla achieved significant gains between 2023 and 2025.

On April 9, 2025, Tesla shares saw their most significant single-day gain in recent years, rising approximately 22.7%, marking one of the most remarkable rallies since the 2020 pandemic. On that day, the broader U.S. market staged an epic rebound, with the Dow, S&P 500, and Nasdaq all recording substantial gains; the Nasdaq alone surged over 12%, its second-largest single-day increase in history, as tech growth stocks staged a collective breakout.

A core driver was the U.S. government's announcement of a 90-day suspension of certain trade tariffs, which eased previous market concerns over trade friction and significantly improved risk appetite.

The news drove capital back into high-valuation growth sectors. As a high-beta asset, Tesla surged on heavy volume during the rebound, benefiting from the combined effects of marginal improvements in macro policy and a significant recovery in market liquidity.

On October 24, 2024, Tesla shares recorded their second-largest single-day gain since 2020, rising approximately 21.9%.

The core driver of this significant rally was the third-quarter fiscal 2024 earnings report, which exceeded market expectations. Although total revenue was slightly below consensus estimates, net income grew 17% year-over-year, and earnings per share were significantly higher than analyst forecasts. Additionally, gross margins rose to a multi-quarter high, driven specifically by a record contribution from regulatory credit sales, which led to an unexpected boost in overall profitability.

Furthermore, management expressed optimism regarding the 2025 vehicle delivery growth outlook (projected at 20%–30%) during the earnings call, bolstering market confidence in future profitability and growth potential.

On March 9, 2021, Tesla shares recorded their third-largest single-day gain since 2020, closing up 19.6%, marking one of its strongest single-day performances in nearly a year at that time.

After hitting an all-time high in late January, TSLA shares underwent a sustained correction, dropping more than 30% from their peak, reflecting market concerns over waning risk appetite for high-valuation growth stocks.

As the broader tech sector came under pressure in early March, Tesla shares faced significant downward momentum. The surge on March 9 erupted at the intersection of technical and sentimental recovery: U.S. equities rebounded amid improved overnight capital flows and a short-term dip in Treasury yields, prompting a rotation back into high-beta growth stocks and lifting the electric vehicle sector across the board.

At the same time, several Wall Street analysts issued more positive ratings on Tesla, arguing that the recent sell-off was overdone and highlighting the company's long-term advantages in manufacturing capacity and future growth trajectory, which prompted rapid dip-buying.

Tesla's Top 3 Declines Since 2020

On September 8, 2020, Tesla shares suffered their largest single-day drop in history, closing down approximately 21% and wiping out tens of billions of dollars in market value.

The primary trigger for this plunge was the widespread market expectation that Tesla would be added to the S&P 500 Index following four consecutive quarters of profitability, an inclusion that would have sparked massive inflows from passive index funds.

However, during the S&P Index Committee's rebalancing in early September, other candidates were selected, and Tesla was excluded. This led index-tracking funds to sell off anticipated long positions, serving as the direct catalyst for the sharp decline.

In addition, Tesla had just completed a $5 billion secondary stock offering, and the increased supply of shares weighed on the price. Following a period of substantial gains, technical correction risks had accumulated; as institutional reduction of positions coincided with a broader pullback in tech stocks, selling pressure magnified instantly, leading to a rapid plunge in the share price.

This sharp decline was driven by systemic risks resulting from a combination of factors rather than deteriorating fundamentals. The event also marked a market repricing of Tesla's valuation bubble risk.

Tesla's single-day declines were concentrated in 2020, which was closely linked to the macro environment of that year. The pandemic outbreak triggered intense volatility across global financial markets, putting the tech sector under pressure and leading to multiple market-wide circuit breakers.

Against this backdrop, as a high-valuation, high-beta tech growth stock, Tesla's share price was significantly impacted by systemic risks, experiencing a series of sharp sell-offs.

Statistics show that since 2020, Tesla's second and third largest single-day drops both occurred during such systemic risk events, underscoring the amplifying effect of tightening market liquidity and declining investor risk appetite on its stock price.

A similar decline driven by systemic risk occurred in 2025 due to Donald Trump's sustained tariff policies, which caused the Nasdaq to plunge over several days. Rising risk aversion led to a continuous slide in Tesla's share price; on March 10, 2025, alone, the stock plummeted 15.4%.

What Can We Learn From the Volatility of Tesla's Stock Price?

Tesla's frequent surges and plunges clearly demonstrate that share prices are often not a direct reflection of changes in corporate fundamentals, but rather a concentrated expression of shifts in market risk appetite, liquidity conditions, and macro expectations.

As a high-valuation, high-volatility growth stock, Tesla acts as an amplifier for sentiment and capital. When the market enters a risk-on phase, it often outperforms the major indexes; conversely, once liquidity tightens or uncertainty rises, its drawdowns are magnified.

From a temporal perspective, whether it was the crash during the 2020 pandemic or subsequent typical single-day moves, the primary drivers have largely been systemic environment shifts rather than specific operational details of the company.

This suggests that for investors, understanding shifts in risk premiums is often more vital than obsessing over short-term sales or quarterly profits. Tesla's trajectory reminds us that investing in high-volatility assets is essentially about gauging macro cycles and market sentiment rather than simply scoring a company's fundamentals.