Elon Musk joins trump team, Tesla shares take a hit
Tesla's stock price fell by 13-14% on Monday, March 10. This marks another week of the electric car manufacturer's shares declining on the stock exchange, which coincides with Tesla creator Elon Musk's involvement in Donald Trump's administration.
Let's recall that Tesla has experienced the longest stock value decline in its 15-year history. As CNBC highlights, this has been ongoing without interruption since Elon Musk went to Washington over seven weeks ago.
Tesla's stock was listed at $252.53 at the session's opening. By 12:30 PM Eastern Time, it was down to $225.94. In mid-December 2024, the stock had been valued at $488.53 per share. Since the beginning of the year, Tesla's stock price has dropped by 42%. Tesla's market capitalization is now $723.2 billion.
Elon Musk in the White House, Tesla's stock in the doldrums
As we mentioned earlier, the billionaire's public activity remains significant. Investors are concerned about Musk's political impact on Tesla. His involvement in the Trump administration and controversial statements on platform X raise concerns.
Musk's role as an advisor to the president and leader of the Department of Government Efficiency (DOGE) introduces uncertainty about future demand for Tesla products. The rise of anti-Musk sentiments in Canada, the U.S., and Europe is leading to protests and acts of vandalism at Tesla plants.
Tesla's valuation is still 33% higher than at the beginning of March last year. Therefore, despite the difficulties, some analysts see potential in Tesla's upcoming products. Wedbush Securities added Tesla to its "Best Ideas" list, predicting that Musk will focus on the company in the second half of 2025. TD Cowen is also optimistic, expecting a new product cycle in 2025-26 to reignite sales growth.
Reuters notes that while Tesla currently earns predominantly from producing electric cars, a significant part of the company's stock valuation is based on hope — precisely, the production of autonomous vehicles. The company has failed to fulfill this commitment, despite Musk repeatedly promising since 2016 that autonomous Teslas would be available by the following year.
