Tesla's stock has significantly dropped, plunging 15% to its lowest point since October 2024, driven by various factors, including decreasing sales, intense competition, and backlash against CEO Elon Musk’s political affiliations with the Trump administration. The company's stock is now down approximately 45% from its all-time high of $1.5 trillion, recorded just four months prior.
Investors are increasingly alarmed by Musk's deepening ties to former President Trump. Initially, Musk's appointment as head of the Department of Government Efficiency (DOGE) was met with optimism, but it has since resulted in widespread protests against Tesla. The situation escalated after Musk was perceived as making gestures associated with extremist movements at Trump’s inauguration, which triggered outrage among customers and supporters.
Protests under the banner of the “Tesla Takedown” have erupted across the U.S. and Europe. Demonstrators have vandalized Tesla dealerships, set vehicles ablaze, and some protests have turned violent. Over the weekend of March 8-9, 2025, protests intensified, with incidents of arson reported, particularly as former supporters now call for boycotts against the brand.
For example, just last week, approximately 350 demonstrators gathered outside Tesla's dealership in Portland, Oregon, with over nine arrests occurring during this and other protests. The growing unrest has seen protesters calling for Musk to step away from politics and focus on his company.
Meanwhile, Tesla's sales figures tell another story of concern. Reports indicate sales have plummeted sharply, particularly in China, where the company experienced a staggering 49% drop. Comparatively, Chinese rival BYD has increased its market share, selling over 318,000 electric vehicles—up 161% year-on-year—resulting in Tesla's shipments reaching their lowest levels since mid-2022.
The mounting pressures from protests and falling sales have led to substantial financial losses for Musk, whose personal fortune saw sharp declines—a staggering $20 billion wiped out on one day alone as of March 10, 2025. Musk's vulnerability was visible during his appearance on Fox Business, where he expressed distress over his dual roles. "With great difficulty… I'm just here, trying to make government more efficient, eliminate waste and fraud and so far we are making good progress," Musk explained.
Adding to Musk's challenges on the political front, President Trump publicly stated on March 11, 2025, his intention to purchase a new Tesla as a show of support for Musk amid the turmoil. Trump praised Musk publicly, asserting he was “putting it on the line” and doing a “fantastic job.” This surprising endorsement follows Trump’s earlier revocation of several green initiatives, including the cancellation of electric vehicle mandates, signaling his previous disapproval of the EV market.
Trump’s announcement has bolstered Tesla's stock slightly, with shares recovering about 5% during pre-market trading sessions, yet the overarching sentiment remains deeply pessimistic. Analysts from UBS have downgraded expectations for Tesla stock, with Joseph Spak expressing concern over declining vehicle demand, particularly for the Model 3 and Model Y, slashing the price target to $225 from $259.
Looking forward, analysts predict continued economic strain on the company, foreseeing flat or declining vehicle deliveries throughout 2025. Compounding these issues, the Trump administration's new tariffs on steel and aluminum are poised to escalate production costs and create potential supply chain disruptions, especially with Tesla’s reliance on Chinese suppliers.
Despite the chaos, some investors remain steadfastly optimistic. Ark Investment’s Cathie Wood believes Tesla’s future is still bright, asserting potential growth sectors such as robotaxis. Fellow analyst Dan Ives backed up Wood’s claims, emphasizing the need to defend the stock and its long-standing potential.
Currently, Tesla shares are trading at approximately $222.15, reflecting continued volatility with after-hours trading showing drops to $215.20. The challenges surrounding the company seem multifaceted with the future uncertain, as protests intensify, sales diminish, and leadership faces unprecedented scrutiny. The saga of Tesla under Musk's leadership serves as both a compelling and cautionary tale of how intertwined politics and business can lead to dramatic highs and lows for companies at the forefront of innovation.