Tesla’s stock is experiencing a sharp decline despite CEO Elon Musk’s growing influence in the White House under President Donald Trump. Investors are growing increasingly concerned about market competition, delayed product launches, and Musk’s political entanglements.
Tesla’s Stock Crash: What’s Happening?
Tesla shares plummeted by 15% this week, hitting $215—the lowest since Trump’s election victory. Although they rebounded slightly to $240, the stock remains in freefall from its December 2024 peak of $435. Despite Musk’s role in the Trump administration as the head of the Department of Government Efficiency (DOGE), Tesla’s market value continues to erode.
Why Are Tesla’s Shares Falling?
Several factors are contributing to Tesla’s declining stock:
- Overvaluation Concerns: Experts argue that Tesla’s stock was highly inflated compared to its actual earnings.
- Delayed Product Launches: The new Tesla Model Y refresh has been postponed, with no new models introduced in 2024.
- Rising Competition: Traditional automakers and emerging EV companies, particularly China’s BYD, are eating into Tesla’s market share.
- Plummeting Sales: In key markets like Germany, China, and Australia, Tesla sales have dropped by up to 76% due to economic shifts and Musk’s political affiliations.
Musk’s Political Moves & Tesla’s Troubles
Musk’s deep involvement with Trump’s administration is affecting Tesla’s image. His endorsement of right-wing political figures has led to boycotts, vandalism, and arson attacks on Tesla properties worldwide. Additionally, his role at DOGE, which aims to cut government spending and jobs, is raising concerns about economic instability.
How Trump’s Policies Impact Tesla
Trump’s stance on tariffs, subsidies, and clean energy policies is creating uncertainty for Tesla:
- Tariffs on China: As Tesla relies on China for production and exports, Trump’s trade war could disrupt its supply chain.
- EV Subsidy Rollbacks: The administration’s reluctance to support green energy could weaken demand for electric vehicles.
- Retaliatory Trade Measures: Other countries imposing tariffs on U.S. exports may further damage Tesla’s global sales.
Will Tesla Recover?
Tesla’s future hinges on Musk’s ability to refocus on the company and deliver promised innovations. Delayed self-driving technology and stalled robotics projects have disappointed investors, raising doubts about Tesla’s leadership in the EV market. Meanwhile, growing tensions between Musk’s political agenda and Tesla’s environmentally-conscious customer base could continue to erode investor confidence.
While Musk’s power in Washington continues to grow, Tesla’s stock tells a different story. The company faces fierce competition, political backlash, and internal struggles that threaten its dominance in the EV market. Unless Tesla can reverse its declining sales and restore investor trust, its stock could continue to struggle despite Musk’s soaring influence.
