Tesla shares plummeted on Monday as skepticism surrounding Elon Musk’s electric vehicle company continues to mount. Following a post-election “Trump bump,” the company’s stock fell by 15.4% to $222.15, marking the lowest trading point for Tesla since late October. This dramatic drop reflects a growing pessimism among investors amid declining global sales for the automaker. Monday’s fall, the most significant for Tesla since September 2020, occurred against a backdrop of Wall Street turmoil triggered by uncertainties regarding the former Trump administration’s trade strategies.
Analysts have partly blamed the decline in Tesla’s stock and vehicle sales on Musk’s overt support for former U.S. President Donald Trump as well as other far-right political figures worldwide. Contributing to Trump’s 2024 election campaign with $270 million, Musk made public appearances supporting the former president and celebrated his victory over Democratic candidate Kamala Harris. Initially, Tesla’s stock soared to $479 per share by mid-December but has since dropped significantly, losing 40% of its value.
Musk has increasingly been identified with the Trump administration’s aggressive government downsizing efforts under the Department of Government Efficiency, or DOGE. This department aims for substantial federal worker layoffs and reducing public expenditure. Analysts suggest that Musk’s political leanings clash with the typical Tesla demographic, often perceived as affluent, environmentally minded liberals interested in reducing fossil fuel usage by opting for electric vehicles.
In California, Tesla’s largest American market, sales have faltered, contributing to the company’s first reported annual global sales decline last year. Research from Jato Dynamics shows Tesla’s January sales in Europe tumbled 45%, despite a general rise in electric vehicle sales in the region, with Germany and France particularly affected. Recent figures from China reveal that Tesla’s sales have been cut in half compared to the previous February, attributed more to increased local competition than Musk’s politics.
Concerned by a potential downturn in U.S. Tesla deliveries, Wall Street analysts highlight that UBS Global Research anticipates a 5% drop in deliveries for the first quarter and the full year 2024 compared to previous periods. According to UBS analysts, “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 indicates a softer demand.”
Tesla showrooms in the United States have faced protests, with some vehicles vandalized and criticized through bumper stickers proclaiming, “I bought it before Elon went nuts.” Alongside supporting Trump, Musk has openly backed the far-right, pro-Russian, and anti-Muslim party in Germany, called British Prime Minister an “evil tyrant,” and disparaged Canada—a crucial market for Tesla—by stating it’s “not a real country.”
The controversies are not limited to Tesla, as other Musk-led ventures have also encountered issues recently. His X social media platform experienced multiple crashes on Monday, which Musk attributed to a “massive” cyberattack. Moreover, SpaceX, another Musk venture, suffered a setback last week when one of its rockets exploded over Florida, two months after a similar incident with another rocket.
