Tesla's stock is experiencing tumultuous times, plummeting 55% since its mid-December 2024 high. Investors are becoming increasingly vocal about concerns surrounding CEO Elon Musk's commitment to his role, suspecting he may be spending more time on his duties with the Department of Government Efficiency (DOGE) than on steering Tesla forward.
On March 10, 2025, Tesla shares saw their most significant drop since September 2020, plunging 15%. This loss exacerbated wider concerns over the electric vehicle company's performance, particularly as the stock has been on a downward trend for seven consecutive weeks since Musk shifted focus to government restructuring and cutbacks. The 15% drop heralded another grim chapter for Tesla, which now trades around $221, significantly below the $251.44 value seen just after the 2024 Presidential elections.
Musk's high-profile commitments beyond Tesla, particularly his ties with the Trump administration, have stirred unease among investors. Many feel this strays him too far from core responsibilities to Tesla, with Garrett Nelson, senior equity analyst at CFRA Research, voicing doubts about Musk's ability to effectively manage multiple endeavors. "It's become clear he's now spending more time on DOGE than anything else," Nelson remarked, highlighting investor dissatisfaction.
Since the start of 2025, Tesla’s shares have stuttered with over -31.6% declines witnessed within 30 days by the end of February, according to prior reports. While previous performance indicated rebounds and average annual returns of around 131% historically, the looming question now is whether this trend can continue amid such turbulence.
Further compounding the issues, Tesla’s European sales plummeted 45% amid fierce competition from companies like BYD and SAIC Motor. Investors have started adjusting their forecasts; UBS analyst Joseph Spak noted reduced delivery expectations and forecasted unit sales for 2025 down 5% year-over-year. His stance reflects the growing concern surrounding Tesla's brand image, particularly as protests erupt across the U.S. and Europe against Musk and his government affiliations.
At this point, investors seem to feel the deep ramifications of Musk’s political presence. Longtime Tesla shareholder Ross Gerber did not mince words either: “The truth of the matter is the company should be run by somebody who isn't so political and can bring the brand back, if that's possible.” This sentiment reflects increasing worry as shareholders grapple with declining brand perception linked to Musk’s outside involvements.
Musk's unique brand power, which many experts estimate at $150 to $200 per share, runs parallel with financial performance challenges. Analysts are warning investors face a catch-22 situation—Musk’s presence bolsters stock value, yet his distractions appear to be dragging Tesla down. Nelson explained, "If you're a Tesla shareholder, you're caught in a catch-22, whereby Musk's presence accounts for a significant percentage of the company's value, but his presence is also starting to weigh on the company's brand perception and financial performance."
Dan Ives, another bullish analyst from Wedbush, maintains optimism about Musk's leadership longevity, assuring investors of at least the next five to seven years. But with Tesla's current predicament, the timeline may feel uncertain. Ives stated, "Musk is going to be CEO of Tesla for at least the next five to seven years and likely longer," indicating Tesla's future hinges on innovations and product developments rather than its current dwindling sales figures.
Overall, Tesla emerges as not only the worst performer on the S&P 500 as of 2025, but it raises pivotal concerns about whether Musk should re-strategize or delegate operational responsibilities moving forward, which many experts advocate. The claims of diluting Musk's presence hints at underlying tensions, rife with questions of potential executive reshuffles. Tesla must address challenges effectively before it falls too deep, managing recovery preparations as new models are lined up for launch. Meanwhile, stakeholders are holding their collective breath, hoping for signs of rejuvenation from the electric vehicle giant.