Direxion Daily TSLA Bull 2X Shares (TSLL) experienced a significant plunge of 9.85% in pre-market trading on Wednesday, reflecting growing concerns surrounding Tesla's performance and future prospects. This leveraged ETF, which aims to deliver twice the daily performance of Tesla stock, saw its value drop sharply as investors reacted to a series of challenges facing the electric vehicle giant.

The decline comes in the wake of Tesla's disappointing first-quarter results, which saw automotive sales decline by 20% year-over-year to about $14 billion, while net income dropped by 71% to $409 million. The company's total revenue fell 9% to $19.3 billion, with adjusted earnings per share of $0.27 falling far below Wall Street's consensus estimate of $0.39. These poor results have led some analysts to label 2025 as a "throwaway year" for Tesla.

Several factors are contributing to Tesla's struggles. The company is facing significant headwinds from potential tariffs, particularly on EV batteries and semiconductors, which could substantially increase production costs. Economic uncertainty and recession fears are also putting pressure on consumer demand for high-ticket items like electric vehicles. Additionally, Tesla's brand image has taken a hit, with a recent survey indicating that 47% of Americans now view the company negatively, possibly due to CEO Elon Musk's involvement with the controversial Department of Government Efficiency (DOGE). Furthermore, the announcement of a partnership between Waymo and Toyota to explore autonomous driving technologies suggests increasing competition in the robotaxi market, a sector where Tesla had hoped to gain a significant advantage.