Tesla's Market Turmoil: Investor Confidence Plummets Amid Political Controversy.
Tesla's stock took another major hit on Monday as investor confidence in Elon Musk’s electric vehicle company continues to erode, following an initial surge post-election, often referred to as the “Trump bump.”
The company’s shares plunged by 15.4% to settle at $222.15, marking their lowest point since late October. This dramatic decline underscores a growing sense of pessimism among investors as Tesla faces plummeting sales worldwide. Monday’s drop was the steepest since September 2020, occurring amid a broader Wall Street sell-off fueled by uncertainty surrounding the Trump administration’s trade policies.
Industry experts largely attribute Tesla’s recent stock struggles—and its declining vehicle sales—to Musk’s outspoken support for President Donald Trump and various right-wing political figures across the globe.
Musk funneled $270 million into Trump’s 2024 re-election campaign, appeared alongside him at public events, and celebrated his victory over Democratic candidate Kamala Harris in November. Initially, Tesla’s stock soared to a peak of $479 per share by mid-December. However, since then, the company has experienced a staggering 40% decline in its market value.
The Tesla CEO has become a central figure in the Trump administration’s aggressive cost-cutting initiative, officially named the Department of Government Efficiency (DOGE). This new department is pushing for massive reductions in federal workforce numbers and aims to significantly slash government spending.
Market analysts believe Musk’s political stance may be alienating Tesla’s traditional customer base, which has historically consisted of affluent, environmentally-conscious consumers who support electric vehicles as a means of reducing fossil fuel dependence.
Sales figures indicate that Tesla is losing ground in California, its most significant U.S. market. The company also recorded its first-ever annual global sales decline last year. In Europe, Tesla’s sales dropped by 45% in January, according to Jato Dynamics, despite the fact that the overall electric vehicle market showed growth. The situation is particularly dire in key markets such as Germany and France.
Meanwhile, recent figures from China reveal that Tesla’s sales there have nearly halved compared to the previous February. However, analysts note that this drop is primarily due to increased competition from local manufacturers rather than political backlash against Musk.
Concerns are also mounting on Wall Street regarding a potential decline in Tesla’s U.S. vehicle deliveries. Analysts at UBS Global Research predict a 5% drop in deliveries for both the first quarter and the full year compared to 2024.
“Our UBS Evidence Lab data shows low delivery times for the Model 3 and Model Y (generally within two weeks) in key markets which we believe is indicative of softer demand,” they reported.
Protests have erupted at Tesla showrooms across the United States, with some of the company’s vehicles being vandalized. Meanwhile, bumper stickers with slogans like, “I bought it before Elon went nuts,” have been spotted on Tesla cars, reflecting consumer dissatisfaction.
In addition to backing Trump, Musk has also voiced support for a far-right, pro-Russian, anti-Muslim party in Germany, labeled the British prime minister as an “evil tyrant,” and dismissed Canada—a key Tesla market—as "not a real country."
Tesla is not the only Musk-owned company facing challenges. His social media platform, X, experienced multiple outages on Monday, which Musk attributed to a “massive” cyberattack.
Further adding to his troubles, a recent SpaceX rocket launch ended in disaster when the spacecraft exploded over Florida, following another failed launch just two months prior.
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