Elon Musk speaks with President Donald J Trump and reporters in the Oval Office at the White House last month. - Jabin Botsford/The Washington Post/Getty Images
Liberals and government employees aren’t the only people angry with Elon Musk. Tesla’s plunging share price means many investors are angry, too.
Shares of Tesla shot up 84% after election day, peaking just before Christmas, as investors anticipated Musk and his car company would be big winners as a result of Donald Trump’s second term as president. Musk was Trump’s largest financial supporter during the campaign, and has since become the highest-profile member of his administration, by far. In his role as the head of the Department of Government Efficiency (or DOGE), he has been trying to impose deep cuts in spending that had been previously approved by Congress, laying off thousands of federal workers.
But shares tumbled 40% from their peak through Wednesday’s close, losing more than a third of their value just since Trump took office and Musk began wielding power. That means it has lost 87% of its post-election bump.
The drop in share price probably reflects the concern that Musk has been much a more visible – and polarizing – figure in the Trump administration than he was expected to be immediately after the election. Many investors likely figured Musk would be a more traditional “behind the scenes” kind of adviser, not necessarily taking an active role in enacting controversial policies. Musk had enough other business interests, running companies ranging from Tesla to SpaceX to Neuralink to X, to keep him occupied.
But the drop in Tesla’s value is also a sign of the headwinds the company is facing, in addition to increased competition from other automakers, especially those from China, who have made significant gains in their home market and in Europe as well.
Whether it’s one problem or a myriad of problems causing the slump, however, it is clear now that Tesla’s sales woes are dragging the stock price down, too. And it’s not clear what, if anything, could lift Tesla sales going forward.
Global sales are ‘imploding’
While electric vehicle sales in Europe shot up 34% overall in January, sales of Teslas plummeted 50%. Tesla’s sales fell 29% in China, the company’s second largest market after the United States, over the course of the first two months of the year, according to Reuters.
And Tesla’s US sales suffered a 16% drop in US sales between December and January, according to an estimate from Cox Automotive. It’s difficult to directly attribute the drops to any one cause, however, as a drop in that period is typical for the company, which usually makes a major push for year-end sales to hit its full-year financial results target, followed by a drop in January. Sales in January 2024, for instance, were off 24% from its December 2023 sales.
Tesla cars at a charging station in Germany. - Federico Gambarini/dpa/picture alliance/Getty Images
“Globally his sales are imploding,” said Gordon Johnson, an analyst who is mostly critical of Tesla and its shares. “The sales drop in China is about competition but in western nations, people are pissed at him. Whether that’s driving down the sales in western countries, or it’s competition doesn’t matter. There’s little he can do reverse it. And we know he’s not going to have full self-driving. I think this could be the year the Tesla’s shares finally collapse.”
Even even some bullish investors already think Musk is going to wildly miss the mark when it comes to Tesla’s growth this year.
“I think investors are coming to a new expectation around what deliveries are going to look like for the year,” said Gene Munster, managing partner at Deepwater Asset Management. “Three or four months ago, Musk guided to 20% to 30% delivery growth in 2025. And then a month ago he didn’t make any mention of the previous target, which analysts and investors correctly assumed that that meant that target is no longer on the table.”
A polarizing figure
The question is how much of the plunge is a reaction to Musk’s political profile. Munster, who still considers himself a Tesla bull, said he believes about three-quarters is blowback.
“At the time of the election, it was unclear how visible Musk would be (in the Trump administration),” Munster said. “Some believed the whole DOGE thing wouldn’t get off the ground. At this point Tesla investors are seeing Musk as having more authority than Trump. There’s some brand damage that comes from that.”
There were protests outside Tesla stores throughout the country Saturday, with scattered reports of vandalized Teslas. One person was arrested in Loveland, Colorado and faces federal criminal charges after prior acts of vandalism against a Tesla store, and possession of “incendiary devices.”
People participate in a "TeslaTakedown" protest against Elon Musk outside of a Tesla dealership in New York, March 1, 2025. - Leonardo Munoz/AFP/Getty Images
Perhaps the biggest sign of shift in how badly people want to own a Telsa comes from S&P Global Mobility, which has sales data on a state-by-state basis. It broke the data down into “blue states,” meaning states that voted for the Democratic candidate in the last four presidential elections, and “red states,” where Republicans won four straight elections. And within each group of states, it looked at the loyalty rate, meaning the percentage of households that have bought more than one Tesla.
In the blue states, the percentage of repeat Tesla buyers fell, from 72% in the last quarter of 2023 to 65% in the last quarter of 2024. Meanwhile, repeat Tesla buyers in red states edged up very slightly from 47.6% at the end of 2023 to 48.2% during the last three months of last year.
The drop in loyalty rate for Tesla owners in blue states resulted in Tesla losing about a percentage point of market share in those states, which includes some of the nation’s biggest car markets, such as California.
A poll last month by Morning Consult that shows that nearly 32% of US buyers “would not consider” buying a Tesla. That’s up from 27% in a Morning Consult survey a year ago, and only 17% when it asked the question in in February 2021.
By comparison, only 16% of potential buyers were almost certain or very likely to look at a Tesla before buying in the most recent survey, a figure that hasn’t changed much over the last four years.
Beyond any concerns about liberals who might now avoid buying Teslas in reaction to Musk’s politics, Munster said there’s a concern that Musk is distracted from running Tesla, the company on which the majority of his fortune is based on.
“Musk really rewrote the book in terms of leaders’ capacity to do different things. That used to be frowned upon,” Munster said, referring to Musk’s job not only as CEO of Tesla but also SpaceX, the primary owner of social media platform X, as well as the founder of artificial intelligence company xAI and Neuralink, which aims to implant computer chips into people’s brain to control computers. “I think there are natural limitations to what he can do. He has a lot going on.”
Elon Musk leaves after meeting with Senate Republicans, at the Capitol in Washington, Wednesday, March 5, 2025. - Ben Curtis/AP
In addition there could be growing concerns that as trade tensions rise between China and the United States that the Chinese could target Tesla for action because of his role in the Trump administration.
“Beijing grants favors and withholds favors,” according to Isaac Stone Fish, the CEO of Strategy Risks, a business intelligence firm. “They have many levers over Elon Musk and Tesla.”
Tesla bulls still pleased with Trump alliance
But Tesla bulls say there is still an argument for how Musk’s ties to the Trump administration could benefit the automaker, such as easier approval for its plans for self-driving “robotaxis.”
While many Teslas now have a “Full Self Driving” feature that can handle some driving maneuvers, drivers are required to be behind the steering wheel ready to take control of the car. And there are still accidents involving FSD, prompting a number of investigations by the National Highway Traffic Safety Administration.
But Musk has promised that by June he’ll have vehicles ready to provide autonomous operations without drivers transporting passengers in a ride hailing service in Austin, Texas, Tesla’s home base, although Uber and Alphabet’s Waymo unit have already beaten Tesla with a driverless service in that city. And he expects that service to spread quickly and for a Cybercab vehicle to be on the roads by next year without steering wheels, brake or accelerator pedals.
Those promises have bulls still excited about Tesla’s prospects, no matter the current sales problems. They believe the current decline in share price is a buying opportunity for those who believe in that future.
“The real unlock of Tesla value is on autonomy,” said Munster. “Trump loves Musk, and Musk is going to get some of the things he wants, and the big thing is more opportunity to prove the safety of robotaxis. I think that’s going to happen.”
Others have severe doubts about that.
Johnson, the Tesla bear analyst, says that Musk has been promising that truly autonomous vehicles have been just a year or so way for the last decade, and that any problems living up to his latest promises will cause a sharp drop in the stock price, as will the first quarter sales figures due out in early April.
– CNN’s Juliana Liu contributed to this report
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