Tesla faces worst month since 2022 amid Musk’s White House role

Tesla shares have fallen sharply, their worst month since December 2022, after falling a staggering 28% in February, followed by an additional 3% decline in early March. The sharp decline coincides with CEO Elon Musk’s first full month in the White House as part of President Donald Trump’s administration, raising concerns among investors about the company’s future.

Tesla’s stock struggles

The electric vehicle giant’s market value is now around, as reported by CNBC. Despite Musk’s optimistic estimate of “1000% growth for Tesla in five years with excellent execution,” investor confidence has wavered. The company’s recent financial performance has done little to ease concerns.

Worrying financial results

Tesla’s latest earnings report, released in January, painted a worrying picture. The company’s automotive revenue fell 8% from a year earlier, while operating income fell 23%. The main factor behind the decline was a drop in average selling prices for Tesla’s best-selling models, including the Model 3, Model Y, Model S and Model X. This pricing strategy, aimed at boosting demand, is putting further pressure on the company’s profits.

Politics and economic policies add to Tesla’s woes

In addition to the financial struggles, Tesla’s share decline is also attributed to Musk’s increasing political involvement. Now leading the Department of Government Efficiency (DOGE) in the Trump administration, Musk has led a massive reduction in the federal bureaucracy, budget cuts and regulatory rollbacks – all of which have received mixed reactions from Wall Street and beyond.

New tariffs imposed by the administration on imports from Canada and Mexico are also expected to affect Tesla’s supply chain. Many of Tesla’s key suppliers operate in these regions, and the increased costs caused by tariffs could make production more expensive, further squeezing Tesla’s profit margins.

Growing controversy and public backlash

Musk’s political stance has sparked controversy around the world. In Europe, anti-Musk sentiment has reached new heights, sparking protests and boycotts. A recent ad in London depicted a Tesla vehicle as a “swastika” and featured an altered image of Musk, falsely showing him giving a Nazi salute. Meanwhile, reports of arson targeting Tesla vehicles in France have added to the unrest.

The “Tesla Takedown” movement has gained momentum, with activists and celebrities like George Takei urging consumers to stay away from Tesla and reconsider their support for Musk’s ventures. The growing backlash poses a potential long-term threat to Tesla’s brand and market position.

Tesla’s Place in the Autonomous Vehicle Race

Despite the controversy, Tesla continues to push ahead with its ambitious goals in autonomous driving and robotics. However, industry experts suggest that Tesla is lagging behind competitors in the self-driving space. Companies like Waymo have already launched functional robotaxi services, while Tesla’s Cybercab initiative is under development.

Adding to the competition, Chinese automakers are offering advanced autonomous driving capabilities at significantly lower prices, increasing pressure on Tesla’s market share in the EV segment.

Looking Ahead

While Musk remains optimistic about Tesla’s future, the combination of political turmoil, financial constraints, and increasing competition paints a challenging picture for the company. Investors will be closely watching Tesla’s next steps, especially in overcoming regulatory hurdles, addressing supply chain disruptions, and advancing its technological ambitions.

Whether Musk’s political involvement will ultimately help or hinder Tesla remains to be seen, but for now, the stock’s downward spiral is a clear sign of growing uncertainty in the market.