Tesla Inc. (NASDAQ: TSLA) shares continue their downward spiral, extending a months-long decline as mounting concerns over Elon Musk’s political entanglements weigh on the EV maker’s brand and growth outlook.
🚨 Tesla’s Tumbling Stock Price
In early Thursday trading, Tesla shares fell further, adding to their 37% year-to-date decline. The stock has now lost more than half its value since peaking in late December 2024, following its post-election rally spurred by Donald Trump’s victory.
Despite the initial optimism surrounding Musk’s close ties to the newly elected President, investors are increasingly concerned that the Tesla CEO’s political distractions are eroding the company’s focus and market position.
⚠️ Musk’s Political Role Sparks Boycotts
Since Trump’s inauguration, Musk has taken on a high-profile political role in Washington, leading the Department of Government Efficiency (DOGE).
- This federal workforce reform effort, aimed at cutting government red tape, has pulled Musk away from his day-to-day leadership at Tesla’s Austin, Texas headquarters.
- The political spotlight has also triggered consumer backlash, with reports of boycotts and vandalism targeting Tesla vehicles and showrooms.
🔥 Cybertruck Recall Hits Tesla’s Reputation
Adding to Tesla’s woes, the U.S. National Highway Traffic Safety Administration (NHTSA)—a longtime adversary of Musk—has ordered the company to recall around 46,000 Cybertrucks due to a faulty exterior panel.
- The recall of Tesla’s flagship model is a major blow to its reputation, especially as the Cybertruck was positioned as a key growth driver for the company.
- With deliveries still ramping up, the defect could further dampen consumer confidence and slow sales momentum.
📉 Tesla Faces Increasing Brand Risks
Musk’s heavy involvement in Trump’s political agenda is creating polarizing effects on Tesla’s brand image:
- In Europe, Tesla registrations have plummeted by over 70% amid Musk’s endorsement of far-right political groups.
- In China, Tesla’s Shanghai factory deliveries have posted five consecutive months of year-over-year declines, signaling weakening demand in one of its most important markets.
- Back in the U.S., boycotts and consumer protests over Musk’s political stances are adding to the company’s reputational challenges.
⚡ Tesla’s Future in Question
With Musk increasingly consumed by his political ambitions, concerns are mounting over Tesla’s leadership stability and long-term growth prospects.
As the company grapples with regulatory scrutiny, falling demand, and brand erosion, Tesla’s stock volatility shows no signs of slowing.
