Tesla’s stock price, led by Elon Musk, has fallen back to levels seen right after Donald Trump’s victory in the November 2024 U.S. presidential election.
On Wednesday, Tesla shares closed at $290.80 on the New York Stock Exchange, down 3.96% from the previous day.
This followed a sharp 8.39% drop the day before, marking the fifth consecutive session of declines since February 20.
Tesla’s market capitalization at this closing price was approximately $935.4 billion.
On November 5, 2024, the U.S. election day, Tesla stock closed at $251.44. After Trump’s victory was confirmed on November 6, the stock surged 15% in a single day to $288.53, kicking off a strong rally that peaked on December 17 at an all-time high of $479.86.
Since then, Tesla’s stock has been on a downward trend, dropping 39.4% from its peak to return to levels seen on November 6, 2024.
Tesla’s market capitalization reached $1.54 trillion on December 17 but shrunk by $605 billion in just over two months.
Market analysts attribute the stock’s decline to multiple factors, including a sharp drop in Tesla’s sales in Europe and growing consumer backlash in both the U.S. and Europe due to Musk’s political activities, particularly his leadership of the Department of Government Efficiency (DOGE). Investors worry that these factors could hurt Tesla’s business operations.
Gene Munster, managing partner at Deepwater Asset Management, wrote on X on Tuesday that Tesla’s recent stock decline reflects investors adjusting their expectations for the company’s performance this year. Munster noted that the catalyst for this adjustment is Musk’s increased political visibility, which is driving away Tesla customers.
He also pointed out that Tesla’s rumored vehicle delivery target for 2025 is 1.7 million units, representing a 4% year-over-year decline—starkly contrasting Wall Street’s initial expectation of 12% growth. Munster predicted that Tesla’s stock would not decrease until delivery figures align more closely with these lowered expectations.
Dan Ives, a well-known Tesla bull and analyst at Wedbush Securities, also stated in a Monday report that Musk’s involvement in DOGE puts visible downward pressure on Tesla’s stock price.
Ives explained that Wall Street’s primary concern is that Musk dedicates far more time to DOGE than initially anticipated. This raises fears that his divided attention could hurt Tesla at a critical time.