Tesla’s stock plunged 15.4% to $222.15 on Monday, its lowest since October 2023 and the company’s worst single-day drop since September 2020. This decline follows a massive $4 trillion wipeout in US stock markets, driven by fears over President Donald Trump’s economic policies, recession concerns, and rising trade tensions.
After reaching $479 per share in December 2024, Tesla’s stock has now fallen nearly 40%. Analysts link the slump to various factors, including CEO Elon Musk’s political shift toward the right and his $270 million donation to Trump’s campaign, which has alienated some Tesla buyers.
Challenges Mount for Tesla
- Plummeting Sales: Tesla’s sales dropped 45% in Europe in January, with major losses in Germany and France. China saw sales nearly halved compared to February 2024, while in the US, analysts expect a 5% decline in deliveries for the first quarter and full year.
- Brand Image Concerns: Wall Street analysts worry that Musk’s political ties may be tarnishing Tesla’s reputation. While conservatives support him, Tesla’s core customer base appears less engaged.
- Other Setbacks: Musk’s social media platform X (formerly Twitter) suffered widespread outages on Monday due to an alleged cyberattack. Meanwhile, a SpaceX rocket exploded last week, marking its second failure in two months.
Musk’s influence in politics has also grown—he was recently named the face of the Department of Government Efficiency (DOGE) under Trump’s administration.
Despite the turmoil, Musk downplayed the stock drop as a “temporary overreaction.” However, with increasing competition and shifting consumer sentiment, Tesla faces one of its toughest battles yet.
