Just as the carnage in financial markets worsened on Monday, taking the three-day wipeout in global equity value to about $9.5tn, Tesla Inc’s stock extended losses with shares having fallen 55% from a record high reached in mid-December.
Tesla’s stock had surged following President Donald Trump’s election victory, which many expected to be a boon for the company, given CEO Elon Musk’s proximity to the then president-elect.
Instead, Musk’s involvement in political controversies both in the US and abroad has repelled some car buyers and spurred protests against the company.
Tesla has reported first-quarter vehicle deliveries that failed to meet drastically lowered expectations, falling to the lowest level since 2022.
Several analysts had lowered their estimates for Tesla’s sales and earnings in recent weeks, even before the company reported weak vehicle-delivery numbers.
While Tesla is seen as relatively insulated from the 25% tariffs announced by Trump on imported autos, Musk has warned the company won’t be unscathed.
Tesla sales had started slowing even before Musk really threw his weight around in US politics. Since he’s taken a starring role in the Trump administration and become a cheerleader for Europe’s far-right, the company’s fortunes have taken a turn for the worse.
The electric vehicle maker’s deliveries fell to a three-year low in the first quarter as Musk went to work, dismantling US government agencies and went all-in to support anti-immigrant populist politicians.
A decentralised movement called Tesla Takedown has emerged with organisers calling for a boycott of the company’s products.
At the same time, Musk says he’s having “great difficulty” running his businesses while also tending to his work in Washington.
The most dramatic declines in Tesla sales have happened in Europe, where sales fell 43% in the first two months of the year.
In Germany, the situation was particularly stark, with sales plummeting 62% through March — likely the result of potential buyers being put off by Musk’s vocal support for the far-right Alternative for Germany party.
In China, the world’s biggest EV market, shipments from Tesla’s Shanghai plant — destined for elsewhere in the country as well as for export — plunged 49% in February to the lowest since July 2022.
For the time being, numbers for the US, where Tesla derives almost half of its revenue, are harder to come by. Kelley Blue Book, an American market researcher, estimates that the company sold only 43,650 vehicles in February, among its lowest monthly totals over the last three years.
While Tesla is still the most popular EV brand in the US, its market share has fallen from more than 75% in 2022 to under 50% as of 2024, according to KBB.
One company that’s defying Tesla’s current trajectory — China’s BYD, short for Build Your Dreams — is on a tear, with sales soaring 58% in the first quarter.
Musk has taken a less-is-more approach to Tesla’s lineup. BYD, by contrast, offers more models, and most of them sell for less than Musk’s most popular vehicles.
And then there’s the impact of Musk’s political activities.
The starkest sign that Musk’s close links to Trump and the Republican Party were beginning to drag on Tesla came from California — a Democratic stronghold — where its registrations fell in all four quarters last year.
Since the US election in November, the backlash has only grown.
One of Wall Street’s most bullish Tesla analysts slashed his price target for the stock by 43%, citing a brand crisis created by Musk and Trump’s trade policies.
“Tesla has essentially become a political symbol globally,” says Daniel Ives, a Wedbush Securities analyst who’s rated the carmaker’s shares a buy for the last four years. “It is time for Musk to step up, read the room, and be a leader in this time of uncertainty.”
