Tesla Stocks Tumble as Elon Musk’s Political Role Grows More Divisive
Tesla shares plunged on Monday, hitting their lowest point since before Election Day, as investors registered the impact of falling sales and increasing protests over the high-profile political role that Elon Musk, the company’s chief executive, has taken on.
At the close of trading, the electric-car maker’s shares were down more than 15 percent for the day, and more than 50 percent from a mid-December peak. The day’s loss was the biggest for Tesla stock since 2020 and far outstripped the 2.7 percent drop on Monday in the S&P 500.
The steep rise in Tesla shares that followed Donald J. Trump’s election as president, and Mr. Musk’s appointment as de facto government cost-cutting czar, has evaporated along with more than $700 billion in stock market value.
Investors had hoped that Mr. Musk’s financial support for the Trump campaign and his ties to the White House would benefit Tesla, helping to clear regulatory hurdles to the company’s autonomous driving technology.
Instead, Mr. Musk’s ubiquitous presence in Washington has proved to be a liability. Investors worry that Mr. Musk has not been spending enough time managing Tesla when sales of the company’s cars are plunging.
Tesla has become the target of increasingly intense protests by people enraged over Mr. Musk’s leading role in slashing jobs of park rangers and other civil servants while gutting foreign aid and other programs.
Last week, someone set fire to Tesla charging stations near Boston; shots were fired at a Tesla dealership in Oregon; and protesters were arrested at a nonviolent protest at a Tesla dealership in Lower Manhattan.
The political backlash is blamed at least in part for dismal sales numbers in Europe last month, including a 76 percent decline in Tesla sales in Germany, the continent’s largest car market. Mr. Musk has endorsed far-right parties in European countries, including in Germany. Analysts also attribute sales declines to a lack of new models and increasing competition.
In January, Volkswagen sold more electric vehicles outside China than Tesla, according to figures published Monday by SNE Research, a research and consulting firm in South Korea.
Tesla is likely to suffer less than other carmakers from the trade conflicts provoked by Mr. Trump, but the company could be a victim of worsening relations with China. Tesla’s largest factory is in Shanghai, where the company makes cars for the Chinese market and for export to Europe and other regions.
