Tesla shares plunge 15% on Monday, marking their steepest decline since September 2020. The sell-off intensifies Tesla’s financial struggles, extending its losing streak to seven consecutive weeks—the longest since its 2010 debut on the Nasdaq.
Since reaching a peak of $479.86 on December 17, Tesla’s stock has lost more than 50% of its value, wiping out over $800 billion in market capitalization. Monday’s plunge was Tesla’s seventh worst trading day on record and led a broader decline in U.S. markets, with the Nasdaq tumbling nearly 4%, its worst drop since 2022.
Key Factors Behind Tesla’s Stock Decline
The sharp downturn in Tesla shares plunging 15% is attributed to a combination of political uncertainty, brand challenges, and global trade concerns.
1. Elon Musk’s Role in the Trump Administration
Since Elon Musk took on a key role in the second Trump White House, Tesla’s stock has been in freefall. During an interview with Fox Business, Musk admitted managing his businesses while serving in the administration was proving “difficult.”
2. Trade War Concerns and Tariffs
Market analysts have linked Tesla’s stock drop to uncertainty around President Trump’s proposed tariffs, which could impact Canada and Mexico—key markets for automotive suppliers. Higher tariffs could disrupt production and increase vehicle costs.
3. Tesla Brand Erosion
Musk’s controversial political rhetoric and his leadership in the Department of Government Efficiency have contributed to growing negative sentiment around Tesla. Protests, vandalism, and arson attempts at Tesla facilities across the U.S. highlight mounting public discontent.
4. Tesla Sales Decline Amid EV Market Growth
Bank of America analysts reported a 50% drop in Tesla’s European sales in January compared to the previous year, as some buyers turn away from the brand. Meanwhile, the global EV market grew 21% year-over-year, driven by strong demand in Europe and China.
Tesla’s Model Y remains the best-selling electric SUV worldwide, but competition from Chinese automakers is intensifying. Geely Geome, a Chinese electric vehicle, overtook Tesla’s Model 3 sedan in global sales for January.
What’s Next for Tesla?
Despite the steep stock decline, Musk remains optimistic, posting on X (formerly Twitter), “It will be fine long-term.” However, with Tesla facing increasing political backlash, trade policy concerns, and stiff competition in the EV space, the road ahead remains uncertain.
Stay tuned on Techwey for more updates on Tesla shares plunging 15% and its impact on the electric vehicle market.
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