Maybe DOGE isn’t translating to the American public as Elon Musk intended. Why do we think that? Tesla’s stock faced a dramatic sell-off on Wall Street on Monday, with shares plummeting 15%, marking the electric vehicle maker’s worst single-day decline since September 2020. This sharp drop comes as Tesla wrapped up its seventh consecutive week of losses on Friday, the longest losing streak since the company debuted on the Nasdaq in 2010. The downturn began shortly after CEO Elon Musk took on a significant role in the second Trump White House, traveling to Washington, D.C., to lead initiatives to reshape federal government efficiency.
Let’s talk numbers.
Since reaching a peak of $479.86 on December 17, Tesla’s stock has lost more than 50% of its value, erasing over $800 billion in market capitalization. Monday’s decline marked the seventh-worst trading day in Tesla’s history. The sell-off contributed to a broader slump in U.S. equities, with the Nasdaq Composite Index tumbling nearly 4%, its steepest drop since 2022.
The uncertainty surrounding President Donald Trump’s tariff policies has been a key factor in Tesla’s recent struggles. Canada and Mexico, critical markets for automotive suppliers, could face increased tariffs, potentially sparking a trade war that would disrupt production and drive up prices. This has added to investor concerns about Tesla’s future performance.
But wait, tariffs are reasonable, right? Nah, they’re not.
Tesla’s brand has also faced erosion due to Musk’s controversial political rhetoric and prominent role in the Trump administration. As the head of the so-called Department of Government Efficiency, Musk has become the public face of efforts to dramatically reduce the federal government’s workforce, spending, and operational capacity. His actions have drawn criticism, particularly his use of social media platform X to attack judges and promote false Kremlin narratives about Ukrainian President Volodymyr Zelenskyy.
The apparent backlash against Musk has extended to Tesla’s operations, with activists and former supporters staging protests at Tesla facilities across the U.S. Reports of vandalism and arson attempts targeting Tesla vehicles and properties have also surfaced. In Loveland, Colorado, a Tesla store and service center experienced repeated instances of vandalism and arson attempts, most recently on March 7, according to local police.
Additionally, Bank of America analysts noted additional challenges for Tesla in a report released Monday. The firm revealed that Tesla’s new vehicle sales in Europe dropped approximately 50% in January compared to the previous year, partly due to growing dissatisfaction with the brand. Some customers are also delaying purchases as they await the updated version of the Model Y, Tesla’s popular small SUV.
Despite the rapid stock decline in Tesla’s sales, the Model Y remained the best-selling battery electric vehicle globally in January, followed by China’s Geely Geome, which surpassed the Tesla Model 3 sedan for the month. Overall, global sales of electric vehicles, including fully electric and plug-in hybrid models, rose 21% in January compared to the previous year, driven by strong European demand, according to Bank of America. However, Tesla’s struggles highlight the company’s challenges in maintaining its dominance in an increasingly competitive market.