Tesla (NASDAQ: TSLA) continues to give back the kicker it enjoyed in the wake of the United States election with shares of the electric vehicle maker swan diving a further 8%.
Year to date, the stock’s share price has shed a quarter of its capital value, while the Nasdaq is down only 1.5%.
The collective 35% slide since its record close on 16 December means the stock is back under the US$1 trillion it reached last November.
The stock has experienced investor backlash following CEO Elon Musk’s involvement in President Trump’s new U.S. administration.
With unparalleled access to government computer systems and taxpayer data, Trump has allowed Musk - through his involvement with the Department of Government Efficiency, or DOGE - to fire masses of workers on the U.S. public payroll.
Musk’s extremist political rhetoric has also turned consumers away from the Tesla brand.
Then there are Trump’s announced plans for extensive tariffs on goods from Canada, Mexico and China, which coincided with a decline in Tesla vehicle registrations across Europe in January and February.
Tesla’s fourth quarter reported earnings and sales missed analysts’ estimates, with automotive revenue and operating income dropping 8% and 23% respectively from a year earlier.
Upgrades disappoint
However, consumers have also been disillusioned by Tesla's latest product offerings.
It’s understood that the long-awaited upgrade to Tesla’s partially automated driving system left owners underwhelmed.
Tesla’s “navigate on city streets” feature in China appears to have fallen short of Musk’s promises for self-driving technology.
By comparison, other EV makers in China, including BYD, appear to be offering their partially automated driving systems for free or at a much lower cost.
For example, Xiaomi’s popular model SU7 includes the company’s equivalent technology as a standard option for free.
Added to Tesla shareholder angst, a report out of China, released late January, cited reduced average selling prices across the Texas-based EV car manufacturer's aging lineup of Model 3, Model Y, Model S and Model X vehicles as a major reason for the recent decline.
Sales fall
Recent data from the New Car Dealers Association in California - Tesla’s biggest market in the U.S. - reveals that Tesla sales tumbled 11.6% in the fourth quarter of 2024.
According to data from the European Automobile Manufacturers’ Association, Tesla vehicle sales in Europe in January were down 45% from last year’s 18,161.
Meanwhile, Tesla sold 1,277 new cars last month in Germany, its lowest monthly total since July 2021, while sales in France plummeted 63% in its poorest performance in the country since August 2022.
It’s also suggested that lower sales in Europe mirror disapproval of Musk’s interventions in European political affairs, with the Tesla boss vocalising support for Germany’s far-right AfD party in recent months, and describing it in January as the “best hope for the future” in Germany.
What remains to be seen is whether the Tesla share price can hold onto the 20% gain it still holds following the U.S. election when the share price rose 15% in a single day.
Meanwhile, Musk, a major backer of Trump’s presidential effort, has seen his net worth fall $100 billion due to Tesla’s recent share price falls.
However, he remains the world’s richest person, with a fortune valued at about $380 billion.
