Tesla, the U.S.-based electric vehicle giant, saw its stock plummet by more than 15% on Tuesday, erasing the significant gains it had enjoyed following the U.S. presidential election in November. The sharp decline was triggered by a lowered delivery forecast from a prominent analyst, adding further pressure to a stock already trending downward since its mid-December peak.Tesla Shares Plunge 15%, Erasing Post-Election Gains Amid Delivery Woes
Tesla’s shares had soared after President Donald Trump’s election victory, nearly doubling in value from Election Day to a high of approximately $480 per share. At that point, the company’s market capitalization reached a staggering $1.5 trillion. However, the stock has since retreated to around $222, slashing Tesla’s valuation to roughly $715 billion. This drop marks a stark contrast to the optimism that fueled its post-election surge.
The decline follows a disappointing 2024 for Tesla, which recorded its first annual drop in deliveries in over a decade. This setback defied earlier promises from CEO Elon Musk, who had projected growth for the year. Despite the delivery slump, Musk has continued to rally investors with ambitious visions of breakthroughs in self-driving technology and humanoid robots—ventures that remain speculative and unproven.
Musk’s Wealth and Tesla’s Ties to Trump
Elon Musk, the world’s richest person with an estimated net worth of $300 billion according to Bloomberg, has much riding on Tesla’s stock performance. His personal fortune is closely linked to the company’s share price, which he uses as collateral for loans. A sustained decline could pose financial challenges for the billionaire, who also leads SpaceX and serves as head of the Department of Government Efficiency (DOGE) under the Trump administration.
Tesla’s fortunes appeared intertwined with Trump’s presidency after Musk emerged as a key campaign donor and advisor. As a self-styled cost-cutter for the U.S. government, Musk has spearheaded efforts to slash federal spending and reduce agency workforces, aligning himself with Trump’s “Make America Great Again” agenda. Some analysts initially speculated that Tesla could benefit from this relationship, but the stock’s recent slide suggests investor confidence is wavering.
In a show of support, President Trump announced on March 11 via his Truth Social platform that he plans to purchase a “brand new Tesla” to back Musk and his company. Calling Musk a “key figure” in his administration’s goals, Trump accused “Radical Left Lunatics” of orchestrating a boycott against Tesla to undermine both the CEO and the automaker. The president’s endorsement underscores the deepening ties between Musk and the White House.
Tesla vs. Traditional Automakers
Tesla’s current valuation of $715 billion dwarfs that of legacy U.S. automakers like Ford ($40 billion) and General Motors ($48 billion), despite its recent struggles. The disparity highlights the market’s continued faith in Musk’s long-term vision, even as short-term challenges mount. However, with deliveries faltering and ambitious projects like autonomous vehicles still on the horizon, Tesla faces growing scrutiny from investors and analysts alike.
The analyst downgrade that sparked Tuesday’s sell-off reflects broader concerns about Tesla’s ability to maintain its growth trajectory in an increasingly competitive electric vehicle market. While Musk’s charisma and bold promises have long buoyed the stock, the latest downturn suggests that tangible results may now be taking precedence over hype.
As Tesla navigates this turbulent period, all eyes remain on Musk—both as a business titan and a political influencer—to see if he can steer the company back to its lofty heights.
