- Tesla shares have plunged 14%, marking their worst trading day since 2020 and extending a seven-week losing streak.
- Musk’s political involvement and Trump administration ties have led to boycotts, vandalism, and declining brand perception.
- Tesla’s European sales dropped 50% in January, as EV competition from China grows and consumers await the next-gen Model Y.
Tesla’s selloff on Wall Street intensified Monday, with shares plummeting 14%, marking their worst trading day since September 2020.
The stock has now fallen for seven consecutive weeks, its longest losing streak since Tesla’s 2010 Nasdaq debut. Since peaking at $479.86 on December 17, Tesla’s shares have lost over 50%, wiping out more than $800 billion in market cap.
Trade War Fears and Political Controversy Weigh on Tesla
Tesla’s decline is partially tied to uncertainty surrounding President Donald Trump’s trade policies. With Canada and Mexico as key markets for auto suppliers, tariff concerns and a potential trade war are raising fears of higher production costs and price increases.
Additionally, Tesla’s brand is suffering from political backlash due to Elon Musk’s increasing involvement in the Trump administration, where he’s leading the newly created Department of Government Efficiency. His outspoken political views—paired with incendiary social media activity—have triggered boycotts, vandalism, and arson attempts at Tesla facilities across the U.S.
“When people fear their cars might get keyed or set on fire, even loyal Musk supporters might hesitate before buying a Tesla,” said Ben Kallo, an analyst at Baird, in an interview with CNBC.
Sales Drop in Europe and Growing EV Competition
Tesla’s struggles aren’t just political—its vehicle sales in Europe plunged by 50% in January compared to the previous year, according to Bank of America. Some prospective buyers are waiting for the next-gen Model Y, while others are turning to rising competitors like China’s Geely Geome, which recently surpassed Tesla’s Model 3 in sales.
Despite Tesla’s downturn, global EV sales remain strong, up 21% year-over-year in January, driven by demand in Europe.
What’s Next for Tesla?
With stock markets reeling, EV competition intensifying, and Tesla’s brand under political fire, the road ahead looks uncertain. While Tesla’s Model Y remains the world’s best-selling EV, the company faces mounting pressure on multiple fronts.
Unless Tesla can reverse its sales decline and distance itself from ongoing controversy, its downward trajectory may continue.
