Tesla stock plunged by 15%, wiping out all the gains it had made after the U.S. presidential election. The decline followed an analyst’s lowered delivery forecast, which triggered a wave of selling and increased pressure on the stock.
Tesla had experienced a surge in stock value after Donald Trump’s election victory, reaching its peak in mid-December when the stock was nearly double its Election Day price. However, recent weeks have seen a steady decline, with the sell-off accelerating due to concerns over Tesla’s slowing growth.
Struggles with Deliveries and Market Trends
The electric carmaker closed 2024 with its first annual drop in deliveries in over a decade. This decline contradicted Elon Musk’s earlier predictions of continuous growth, raising concerns among investors.
Musk has long promised groundbreaking advancements in self-driving technology and humanoid robots, but these projects remain uncertain. While his vision keeps investors engaged, Tesla’s recent performance suggests the company is struggling to meet expectations.
Market Value Takes a Hit
Tesla’s market capitalization soared to $1.5 trillion in December 2024, with shares trading around $480. However, the recent drop has sent the stock price down to $222, bringing Tesla’s valuation to approximately $715 billion.
By comparison, traditional U.S. automakers like Ford and General Motors have much lower valuations, standing at $40 billion and $48 billion, respectively. This contrast highlights Tesla’s historically high market value despite increasing competition in the electric vehicle sector.
Elon Musk’s Wealth and Business Ties
Elon Musk’s personal fortune is closely tied to Tesla’s stock. He often uses his shares as collateral for loans, meaning a prolonged drop in stock price could create financial challenges for him.
Despite Tesla’s declining value, Bloomberg estimates Musk’s net worth at around $300 billion, keeping him at the top of the world’s richest individuals.
Trump Backs Tesla Amid Market Turmoil
Amid Tesla’s struggles, Donald Trump expressed his support for Musk. On March 11, 2025, the former president announced his intention to purchase a brand-new Tesla, calling Musk a key figure in making America stronger.
Trump also accused left-wing critics of attempting to harm Musk and his company. He suggested that certain groups were trying to organize a boycott against Tesla.
Additionally, Musk’s role as the head of the Department of Government Efficiency (DOGE) has kept him in the political spotlight. He has been leading efforts to cut federal spending and reduce government agency workforces, aligning with Trump’s cost-cutting agenda.
Future Uncertainty for Tesla
Tesla’s recent downturn raises questions about its future trajectory. While the company remains a dominant force in the electric vehicle industry, slowing deliveries and a volatile stock price indicate growing challenges. Investors will be watching closely to see whether Musk can deliver on his promises or if Tesla’s downward trend will continue.
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