Tesla shares, which rose after the election of Donald Trump, have undergone a dramatic reversal, reflecting the change in the political landscape. After Trump's victory, Tesla shares rose to a record $ 479, which shot Elon Musk's net worth to unprecedented heights. However, the period after taking office saw a steady decline, culminating in a significant 15% drop on Monday, which led the shares to fall to $ 222 - their lowest value since October.
The decline is Tesla's worst one-day performance since September 2020, marking a 53% drop from its peak in December. Since then, the company's market capitalization has fallen by nearly $ 800 billion. Investor concerns are palpable, fueled by Elon Musk’s deep involvement in the Trump administration, particularly his leadership of the Department of Government Efficiency (DOGE), and his admission that he struggles to balance his various commitments.
In addition, a major cyberattack on X (formerly Twitter), another company owned by Musk, has further undermined investor confidence, highlighting concerns about stability and security.
In addition to Musk’s political woes, Tesla’s stock is also suffering from declining sales. Analysts are forecasting a 6% decline in deliveries in the first quarter of 2025 compared to the first quarter of 2024, which itself marked a 9% decline from the previous year.
Despite this recent decline, Tesla remains the world’s most valuable automaker by market capitalization, valued at $696 billion as of Monday. This valuation reflects investors’ perception of Tesla as a technology company driven by its achievements in autonomous driving and artificial intelligence, rather than just a carmaker.
The question remains whether this stock decline is a temporary correction or a sign of a broader shift in investor sentiment. The coming months will be crucial in determining Tesla’s ability to address these challenges and maintain its position as a market leader.