Tesla (TSLA) CEO and Department of Government Efficiency (DOGE) head Elon Musk is asking government employees to submit what they have accomplished in the past week. Tesla investors would like to ask Musk the same question.
Tesla stock is down 30.2% year to date this year — and has nearly given up all its gains since President Trump’s election win on Nov. 5 (the stock closed at $251.44 on Election Day). The stock hit a closing high of $479.86 on Dec. 17 and has slid ever since, tumbling below the $1 trillion market cap level as well.
Tesla shares closed down another 3% on Thursday.
Tesla stock surged after the election of Trump, as Musk tied himself to the now-president in what some have called a “bet for the ages.” Musk’s closeness to the White House led him to create and become the nominal head of the DOGE initiative.
Having the ear of the administration, of course, has been seen as a positive thing for Tesla — largely because it will be easier to overcome the regulatory hurdles the company faces with getting its self-driving and autonomous technology approved for wider use.
But after Tesla stock hit that closing high on Dec. 17, the stock has tumbled 40%.
Among the reasons: The company’s fourth quarter earnings and deliveries were lackluster, and full-year deliveries fell for the first time in the company’s history. Earlier in January, one of Tesla’s autonomous features was probed by NHTSA, adding to other ongoing investigations into self-driving; the polarizing Cybertruck was discounted and facing likely demand issues; and most recently, the company saw European sales tumble in January.
One big culprit is CEO Elon Musk’s behavior. His political activity, both in the US with DOGE’s controversial moves and abroad, where Musk’s embrace of far-right political movements, is likely alienating wide swaths of the public, current customers, and potential Tesla buyers.
In addition, Musk’s forays with politics have investors wondering where the CEO’s attention lies.
To be sure, Tesla stock has been volatile in the past. Short-term downdrafts of 20% and even 30% are not unheard of. The stock tends to exhibit some seasonality as well, with Q1 and Q3 generally down times for the stock.
But a perfect storm of events seems to be weighing on the company’s shares following a tremendous run-up after Trump’s election win.
Still, as always with Tesla, there’s hope for investors. The company just released a refreshed version of the top-selling Model Y, is expected to unveil a cheaper EV in the first half of the year, and is slated to begin paid, unsupervised robotaxi testing in Austin, Texas, in June.
