Tesla inventory plunged 15 p.c on Monday, its steepest drop in 5 years. The value is down over 50 p.c since its December highs. Tesla homeowners, disgusted with Elon Musk’s slash-and-burn ways for the Trump administration, are promoting their automobiles at an enormous loss. And Tesla showrooms throughout the nation have gotten magnets for big crowds of protesters who wish to see the corporate fail spectacularly.
But a minimum of Musk can nonetheless depend on one man to have his again.
“I’m going to purchase a model new Tesla tomorrow morning as a present of confidence and assist for Elon Musk, a very nice American,” President Donald Trump wrote on Truth Social on Monday. “Why ought to he be punished for placing his large expertise to work with a view to assist MAKE AMERICA GREAT AGAIN???”
But it should in all probability take greater than a Cybertruck within the presidential motorcade to make Tesla nice once more. It will take an precise dedication to extra inexpensive electrical automobiles. It will take a extra critical and safer method to driverless vehicles. And it could take a change of management to get the corporate again on observe. Let’s run down the corporate’s issues.
Trump’s election final 12 months despatched Tesla’s inventory value hovering, as buyers rewarded Musk for making the appropriate political wager. It hit a report excessive of $488 in mid-December; by early March, it had sunk to roughly $226.
The wipeout erased over $800 billion in market worth, Tesla’s steepest drop in years. Musk’s personal web value took an over $100 billion hit. (But don’t fear: he’s nonetheless the richest man on this planet.)
What occurred? Setting Musk’s Department of Government Efficiency (DOGE) facet quest and the ensuing protests apart for a second, the best rationalization is that Tesla’s gross sales suck. The firm produced 4 p.c fewer vehicles in 2024 than it did the earlier 12 months. And its deliveries had been basically flat. Tesla earnings got here in gentle, even with a Bitcoin enhance.
Musk’s personal web value took an over $100 billion hit.
In California, Tesla’s largest market within the US, its gross sales dropped virtually 8 p.c within the fourth quarter of 2024 and 12 p.c for the 12 months. Coastal elites’ love affair with the model has soured.
And it’s not simply within the US. In February, Tesla’s gross sales had been down 10 p.c in Spain, 42 p.c in Sweden, 45 p.c in France, 48 p.c in Norway and Denmark, 53 p.c in Portugal, 55 p.c in Italy, and a whopping 76 p.c in Germany. Musk’s endorsement could have helped Germany’s far-right Alternative for Germany (AfD) celebration place second within the current election, but it surely doesn’t appear to have improved his firm’s flagging gross sales in Europe — down 45 p.c in January 12 months over 12 months.
In China, the world’s largest automotive market, Tesla is on a sustained shedding streak. The firm has been backsliding for the previous 5 consecutive months on a year-on-year foundation, in line with information from the nation’s Passenger Car Association. Some of that is probably associated to a short lived manufacturing facility suspension to accommodate the brand new Model Y Juniper meeting line, however rising competitors from home automakers like BYD is placing elevated stress on Tesla.
And in contrast to BYD, Tesla doesn’t promote any hybrid or gas-powered automobiles. It has nothing to fall again on when customers really feel anxious about the way forward for electrical automobiles.
A frequent criticism you see about Tesla is that the corporate’s car lineup is getting just a little lengthy within the tooth. The Model X turns 10 this 12 months, whereas the Model S is pushing 15. Both automobiles have solely acquired minor updates since their preliminary launch. (A Tesla govt promised a refresh later this 12 months.)
The Model 3 and Model Y, which characterize the majority of the corporate’s automotive revenues, had been each up to date not too long ago, however the lag in common updates has opened a window of alternative for Tesla’s rivals. Consumers inquisitive about plug-in energy instantly have a wealth of selections as newer, extra fascinating EVs from Hyundai, Kia, Honda, and General Motors hit the market.
Meanwhile, Tesla’s solely new mannequin to be launched within the final 5 years is the Cybertruck, which has been recalled seven instances since its launch. Musk has mentioned that frequent software program updates obviate the necessity for a extra common cadence of mannequin refreshes.
While Tesla gross sales dropped, gross sales of non-Tesla EVs continued to climb. Americans purchased a report 1.3 million electrical vehicles, a rise of seven.3 p.c 12 months over 12 months, in line with Cox Automotive’s Kelley Blue Book. EVs now declare 8.1 p.c of the market within the US.
Americans aren’t souring on electrical automobiles — they’re simply over Tesla.
For years, Musk has been promising to make an inexpensive electrical car, probably priced at $25,000. He first talked about it in a 2018 interview, saying, “A $25,000 automotive, that’s one thing we will do.” Then, in 2020, on the firm’s first Battery Day occasion, he speculated that Tesla might finally produce upward of 20 million of those automobiles in a 12 months — or roughly twice the present manufacturing of Toyota, GM, or Volkswagen.
Musk has mentioned the extra inexpensive EV could be constructed on the corporate’s next-generation car platform. But slightly than prioritize a car that buyers took to calling the “Model 2,” he spent Tesla’s assets on the costly, polarizing Cybertruck. And after some preliminary pleasure, the truck has changed into a flop. Musk predicted that Tesla would finally promote 500,000 Cybertrucks a 12 months. Last 12 months, the corporate solely offered an estimated 40,000.
Americans aren’t souring on electrical automobiles — they’re simply over Tesla.
Musk has additionally actively gummed up the works for a less expensive Tesla car. Last 12 months, he reportedly canceled the corporate’s plans to construct a low-cost electrical car in favor of going all in on a robotaxi. But after some pushback, he claimed {that a} cheaper Tesla was again on the menu — solely now, the automobiles are anticipated to be constructed on the identical platform because the Model 3 and Model Y. Now, buyers are anxious that this new car will cannibalize Model 3 and Model Y gross sales slightly than enhance the corporate’s earnings total.
Meanwhile, Kia and Volkswagen have introduced plans to really produce inexpensive EVs. And China has cracked the code on budget-priced, extremely inexpensive EVs. The BYD Seagull, for instance, was the nation’s bestselling car final summer season, with about 190 miles of vary and a sticker value of round $10,000. Even with a one hundred pc tariff, the Seagull would nonetheless promote for a value less expensive than most US-made EVs.
Of course, Musk doesn’t assume Tesla even wants a $25,000 car. The firm’s future is in AI — particularly self-driving vehicles and humanoid robots. In October 2024, he undercut his firm’s personal steering to make “inexpensive fashions” by commenting, “I believe having a daily $25,000 mannequin is pointless. It could be foolish. It could be utterly at odds with what we imagine.”
Musk now believes that Tesla is on the verge of fixing autonomy. He’s claimed that totally autonomous automobiles are proper across the nook for nearly a decade now. “Optimus has the potential to be north of $10 trillion in income,” he mentioned throughout the newest earnings name, referring to Tesla’s humanoid robots.
“I believe having a daily $25,000 mannequin is pointless.”
But whereas Musk bloviates about robots, Waymo and others are working actual driverless vehicles on the street. The Alphabet-owned firm simply launched its first partnership with Uber in Austin, Texas — Tesla’s headquarters and town the place Musk has mentioned he plans on launching his personal robotaxi undertaking this summer season.
There’s little proof that Tesla is on the cusp of delivering what Waymo has already performed. The promise that every one Tesla automobiles constructed after 2016 have the {hardware} crucial for full self-driving turned out to be completely false. Musk mentioned the corporate would substitute the onboard computer systems for car homeowners who purchased the FSD bundle, a course of he admitted could be “painful.” Tesla has already been focused with a category motion lawsuit claiming the corporate lied concerning the capabilities of its automobiles.
And then there’s Elon. And DOGE. And the fascist salute. And the chainsaw. And every little thing else occurring behind these darkish sun shades.
Musk’s antics have turned the Tesla model poisonous. Disillusioned homeowners are promoting their automobiles at massive losses. Others are swapping in badges from different car manufacturers or utilizing desperate-sounding stickers to sign their dissatisfaction with the billionaire CEO.
And much more are protesting outdoors Tesla showrooms as a part of a grassroots effort to oppose Musk’s takeover of the federal authorities, injury the corporate’s inventory value, and perhaps even slash the world’s richest man’s web value.
Separately, there have been a rising variety of experiences of arson and vandalism on the firm’s shops. Tesla charging stations have been set on hearth. A showroom in Oregon was shot up. A girl was arrested in Colorado for throwing a Molotov cocktail at a Tesla location. Tesla automobiles have been defaced with swastikas and expletives. Four Cybertrucks had been destroyed in a hearth in Seattle. The rage is actual.
Keep in thoughts, Tesla’s gross sales had been already dropping earlier than all these incidents occurred. The rising dissatisfaction has led some analysts to foretell much more dire numbers for the corporate’s first quarter outcomes this spring.
It’s unclear what can flip the corporate’s fortunes round. Some supporters have began to overtly query whether or not Tesla can proceed to outlive with Musk on the helm. But shareholders aren’t more likely to jettison the controversial CEO but, particularly after voting to approve his multibillion-dollar pay bundle final summer season. The final result was an enormous vote of confidence in Musk’s management — and an enormous validator of his habits.
But that was pre-DOGE, earlier than the salute, and earlier than the inventory wipeout. Tesla’s board is clearly feeling the pinch. Chair Robyn Denholm and director James Murdoch (son of Rupert Murdoch) each offered thousands and thousands of {dollars}’ value of shares previously month.
Lots rests on Musk’s guarantees of a less expensive Tesla, a next-generation car platform, and an precise working robotaxi service. President Trump should purchase all of the Teslas he needs, but when Tesla’s future is constructed on a bunch of falsehoods and fantasies, it’s unlikely the corporate can emerge from this fireplace unscathed.
