Even as Elon Musk has emerged as the most powerful politician in the United States next to only President Donald Trump, his principal business, Tesla, has fared badly and has lost more than half of its value from the high following the election result.
Tesla witnessed its worst day on Sunday as its stock fell by 15 per cent. The day capped the seventh straight week of loss for Tesla — the longest losing streak for Tesla since its market debut in 2010.
While Tesla’s downfall is part of the
broader US market’s decline, as Nasdaq fell by 4 per cent on Sunday, S&P 500 by 2.7 per cent, and Dow Jones Industrial Average by 2.8 per cent, amid fears of stagflation as a result of Trump’s policies, it is undeniable that Musk’s politics is contributing to the decline. It is reflected in plummeting sales over backlash to his politics and lack of focus on business and lack of attention on business.
Musk has himself acknowledged that Doge leaves him with little time to run his many businesses, including Tesla. He told Fox News in an interview that he is running his companies “with great difficulty”.
Tesla’s dream run ends
In the weeks after Trump’s landslide victory in 2024 election, Musk’s Tesla had a dream run as it reached all-time highs.
On December 18, Tesla’s market capitalisation reached all-time high of $1.5 trillion as the stock surged to all-time high of $488.54.
In the 2024 election campaign, Musk emerged as the principal ally and financier of Trump who bankrolled his campaign. Following the election victory, he has been calling shots at the Department of Government Efficiency (Doge), an opaque department whose administration structure, specific roles, and powers, and Musk’s formal role in it are not known publicly.
However, the dream run is now over. From the high of December 17, Tesla’s value has fallen by 50.5 per cent and stock closed at $222.15 on Sunday.
In January and February, as Musk unleashed his extremist politics not just in the United States but also in Europe, car sales fell and Tesla lost naerly 40 per cent value by February-end. Then, in the largest single-day sell-off, the company lost 15.43 per cent value on Sunday.
Musk politics has become liability for Tesla
The fall in Tesla’s value has coincided with Musk becoming a full-time politician. Between presiding over the dismantling of the US government,
running regime change engine across Europe, and abusing politicians who don’t toe the line, he has been bleeding money.
In the United States, Musk has essentially seized control of the federal government and has been firing people at will, defunding government programmes and agencies, and become the overlord of all Cabinet members.
Externally, Musk is running a regime change engine across Europe where he has
vowed to topple democratically-elected moderate governments and replace them with far-right parties. In Germany, he has endorsed neo-Nazi AfD. In the United Kingdom, he has vowed to topple Prime Minister Sir Keir Starmer and prop Reform UK. In Spain, he has put his weight behind far-right party Vox.
Since the post-election high, Musk has lost around $330 billion, or 24 per cent, in net worth, according to the Bloomberg Billionaire Index.
While the idea was that closeness to Trump would get Musk more government contracts, prompt regulatory approvals, and freedom of various investigations that had been launched over a slew of safety and environmental lapses at Tesla and SpaceX, it turns out that his extremist politics is turning away buyers and his focus on politics and dedication of the remainder of the time to abusing people on X has led to politics becoming a liability.
While electric vehicles sales jumped 37.3 per cent in Europe, Tesla sales dropped by 45 per cent in January, according to Yahoo Finance.
The countries where Musk unleashed his extremist politics the most, the UK and Germany, registered the maximum drop in sales.
In the Netherlands, one of Tesla’s biggest Europen markets, a third of Tesla owners said they were considering selling their cars because of Musk’s politics, according to Dutch outlet EenVandaag.
Separately, Stifel analyst Stephen Gengaro told Yahoo Finance that Musk’s extreme politics are plunging Tesla’s favourability.
“We have seen the net favorability rating of Tesla fade to close to its lowest level in the existence of the data. I think it is causing a big, big problem with the near-term sales and just sort of the impact it has on people’s willingness to buy a Tesla,” said Gengaro.
Even as Chinese BYD is taking the EV segment by storm across the world, Musk’s biggest challenge is perception, according to Jacob Falkencrone, global head of investment strategy at Saxo.
“Tesla’s biggest challenge in 2025 isn’t technology — it’s perception. Elon Musk’s political baggage is now weighing on sales, brand loyalty and investor confidence,” Falkencrone told Bloomberg.
A fundamental contradiction
There is a fundamental contradiction regarding Tesla that is now coming to fore in the wake of Musk’s extremist politics.
While Musk is an extremist right-winger, most of the electric vehicles users are moderates or leftists and Musk’s extremism is bound to leave them miffed them. While previously they may have bought a Tesla as the company’s cars may have been the best in the category, now several newer models have come from legacy as well as new companies, sucha as Chinese BYD and SAIC.
A Gallup survey in 2023 found that compared to 16 per cent liberals and 10 per cent moderates, only 3 per cent conservatives seriously considered buying an EV.
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