Tesla Stock Falls Nearly 40 Percent as Sales Slow and Elon Musk's Political Moves Raise Concerns

Tesla’s stock has taken a major hit, shedding nearly 40% since reaching its all-time high in December. After soaring in the wake of Donald Trump’s election victory, Tesla has now given up almost all those gains, as investors grow concerned over slowing sales, disappointing earnings, and CEO Elon Musk’s growing political involvement.

Tesla’s Decline: What’s Behind the Drop?

At the start of the year, Tesla shares were already struggling, falling 28% year-to-date and dipping below the critical $1 trillion market cap mark. The stock had seen a major boost after Trump’s election, largely due to Musk’s close ties to the new administration, which many believed would help Tesla navigate regulatory hurdles—especially for its self-driving technology.

But since peaking at $479.86 on December 17, Tesla’s downward spiral has been driven by several key factors:

• Disappointing Q4 results – Tesla reported its first-ever drop in annual deliveries, raising concerns about demand.

• Regulatory scrutiny – Investigations into Tesla’s self-driving features continue to mount.

• Cybertruck struggles – The highly anticipated vehicle is facing demand issues and price cuts.

• Weak European sales – A noticeable decline in Tesla’s numbers overseas has investors worried.

Adding to these challenges is Musk’s deepening involvement in politics. His public support for controversial figures and policies has sparked debate, with some customers and investors feeling alienated. Many are questioning whether Musk’s focus has drifted away from Tesla at a time when the company needs strong leadership.

Can Tesla Bounce Back?

Tesla’s stock is no stranger to big swings—drops of 20-30% have happened before. But this time, multiple issues are hitting at once, making recovery uncertain.

That said, there’s still hope for investors. Tesla has some major moves on the horizon:

• A refreshed Model Y is now available.

• A lower-cost Tesla model is expected later this year.

• Robotaxi testing is set to begin in Austin by June.

Tesla’s future depends on whether it can stabilize sales, rebuild investor confidence, and shift focus back to innovation. As always, all eyes will be on Musk to see if he can steer the company back on track.

Also Read: Investors Place High-Stakes Bet on Musk and Tesla Under Trump