Tesla shares plunged more than 9.5% this afternoon amid growing investor concerns over CEO Elon Musk’s outspoken political stance.
Investors fear that Musk’s vocal support for Donald Trump and hard-right causes could permanently damage Tesla’s brand. The stock, now down 32% over the past month, has erased all of its post-election gains.
Adding to the pressure, Tesla recently reported a sharp decline in sales. In January, deliveries across the UK, EU, and European Free Trade Area collapsed by more than 45%, while sales in China dropped 11.5%. Meanwhile, its main competitor, BYD, saw sales surge 48%. In the US, California—historically Tesla’s strongest market—experienced a 12% drop in sales last year.
Jacob Falkencrone of Saxo Bank warned in a note to investors: “Elon Musk’s political controversies are becoming a liability. Tesla’s brand favourability is at an all-time low, and his polarising views are alienating core customers, particularly in environmentally conscious markets.”
He added: “Investors are increasingly uneasy about Musk’s divided focus, as he juggles leadership roles at Tesla, SpaceX, Neuralink, and now his controversial position within the Trump administration.
“Some analysts now see Musk as a risk factor rather than an asset, especially as Tesla’s market valuation remains extremely high compared to traditional automakers.”
