Tesla stocks have been in tears since Donald J. Trump won the presidential election. Investors were betting that the automaker would benefit more than $250 million that its CEO, Elon Musk, spent supporting the Trump campaign.
However, a drop in Tesla's shares by 8% on Tuesday wiped out what was left of the rally. Investors who once thought Trump could clarify the regulatory hurdles for Tesla's autonomous driving technology have said Musk has spent too much time in Washington while Tesla sales are plunging. I grew up with concern.
They are also concerned that Musk's immersion in right-wing politics, including the far-right approval of the far-right party in the German election on Sunday, has alienated a considerable number of buyers. In the US, even some Republicans are wary of Musk's slash and burn costs as the so-called director of government efficiency.
The decline in stocks that increased Tesla's market value to less than $1 trillion threatened Musk's position as the wealthiest person in the world, as much of his wealth lies in Tesla stock. And the decline stimulates further anxiety among investors and employees who are upset that Musk has not made clear about his plans to stop the steady erosion of market share in the US, Europe and China. It must be.
The shares closed at $302.80 on Tuesday. This is the lowest since November 7th, two days after the election. This is down 37% from the peak of $479.86 at the end of December 17th.
The losses on Tuesday were at least partly a response to Tesla's catastrophic decline in European sales, according to new vehicle registrations tallied by the European Association of Auto Manufacturers. This was a 50% decrease from the previous year in January. Tesla sales fell in the region despite a 34% rise in the overall electric vehicle market, according to an association report on Tuesday.
Tesla's performance has recently shaken the faith of some investors who have long been optimistic about the company's outlook. Gary Black, managing partner of the Future Fund with 488,000 followers on X, said on social networks Sunday that he was “falsely bullish” about Tesla for “four years.”
Black said it was disappointing that Tesla's latest vehicle, Cybertruck Pickup, was forced to lower prices for Model 3 Sedan and Model Y Sport Utility vehicles, supporting sales and deeper cuts in profits. He said there was.
However, he said his company still owns stake in Tesla and is hoping to recover to $380 in six to 12 months.
Wall Street analysts said Tuesday that they saw a decline in Tesla stock as a return to the trajectory they were in before the post-election bouncing.
Tesla is forecasting vehicle sales growth this year, with European sales data suggesting that carmakers could instead decline.
“This is a sign that Tesla will not see the growth in distribution that management has been leading over the past quarters,” said Morningstar analyst Seth Goldstein.
Goldstein said it's too early to say crucially to influence Musk's political activities and the close relationship Trump has with Tesla.
“If he wants to continue in the politics of driving away some consumers, it's always a risk, and I think there's a concern that Tesla's brand may not resonate as well with its customers. ” he said.
So far, Goldstein added that he has not seen any tangible evidence pointing to a weakening of brands in the US market, although it appears likely to be happening in Europe.
Tesla faces increasing competition from both European automakers and Chinese manufacturers, and Chinese manufacturers offering long-range electric models at a price comparable to Tesla.
