Tesla’s stock plummeted 15% on Monday, marking its worst single-day decline since September 2020, as a combination of political controversy surrounding CEO Elon Musk, a deteriorating brand image, and broader market fears continued to weigh on investor sentiment.

The electric vehicle giant has now suffered through seven consecutive weeks of losses, its longest losing streak since going public on the Nasdaq in 2010.

Since peaking at $479.86 on December 17, 2024, Tesla shares have lost more than 50% of their value, wiping out over $800 billion in market capitalization. Monday’s dramatic selloff represented the seventh worst trading day in Tesla’s history.

The stock’s collapse mirrored a broader downturn in tech-heavy equities, with the Nasdaq Composite tumbling nearly 4%, its sharpest single-day decline since 2022. But Tesla’s decline stood out, as investors increasingly viewed the company’s problems as self-inflicted, largely stemming from Musk’s erratic political entanglements and shifting brand perception.

Trade War Concerns and Trump’s Tariff Plans Send Ripples Through Tesla

Tesla’s sharp decline came amid heightened concerns over President Donald Trump’s proposed tariff increases on Canada and Mexico, two of the most important markets for automotive suppliers. Investors are growing uneasy about the potential for a full-fledged trade war, which could significantly disrupt Tesla’s supply chain and force the company to raise prices.

As an automaker that depends on battery components from China, Tesla is also vulnerable to any escalation in U.S.-China trade tensions, especially given Trump’s history of imposing steep tariffs on Chinese goods. Higher import duties could not only increase Tesla’s production costs but also make its vehicles less competitive in global markets, further dampening demand.

Tesla’s stock, which has long been propped up by investors’ faith in Musk’s vision, now faces a more skeptical Wall Street. As analyst Dan Ives of Wedbush Securities noted in a report, investors are beginning to question whether Musk’s political distractions have left Tesla without a clear strategic direction.

“A pivotal moment for Musk and Tesla.. autonomous, FSD, new cheaper EV models all coming on the horizon to drive demand…but this Musk/DOGE political firestorm needs to be contained for the Tesla brand. Investors need to see Musk lead Tesla at this key moment…the time has come,” he said.

Musk’s Political Rhetoric Pushes Tesla Toward a Branding Crisis

Beyond trade policy concerns, Tesla is grappling with an identity crisis, as Musk’s controversial political persona increasingly alienates traditional buyers. Since taking a leading role in the Trump administration’s Department of Government Efficiency, Musk has repeatedly used his platform to attack judges, amplify far-right conspiracy theories, and promote Kremlin-aligned narratives about Ukraine, drawing widespread condemnation.

Many former Tesla supporters, particularly those who embraced the brand for its climate-friendly innovation, are now distancing themselves due to Musk’s alignment with Trump, whose administration has rolled back environmental regulations and dismissed the urgency of climate change.

Musk’s increasingly combative stance on social media platform X has only worsened matters. His public clashes with critics, journalists, and even his own investors have further alienated key demographics, leading to a noticeable drop in consumer sentiment toward Tesla.

In a research note, Bank of America analysts highlighted that Tesla’s new vehicle sales in Europe plunged by 50% in January compared to the previous year, even as global electric vehicle sales grew by 21%. The sharp decline was attributed to a growing distaste for Musk’s politics, in addition to potential customers delaying purchases while awaiting the next-generation Model Y.

Despite Tesla’s struggles, the Model Y remained the best-selling battery electric vehicle globally in January, followed closely by China’s Geely Geome, which overtook the Model 3 sedan in sales. However, the trend suggests that competitors are steadily eating into Tesla’s market share as once-loyal customers explore alternatives.

Vandalism and Protests Target Tesla Facilities

As Musk leans further into politics, the backlash against Tesla is becoming more tangible. Across the United States and Europe, Tesla facilities have been targeted by protests, vandalism, and even arson attempts, underscoring the deepening divide between Musk and sections of the public.

In Loveland, Colorado, a Tesla service center has been attacked multiple times, with the latest incident occurring on March 7. Authorities have yet to identify the perpetrators, but the pattern of incidents suggests growing hostility toward the brand.

Speaking to CNBC, Ben Kallo, an analyst at Baird, warned that the rise in vandalism incidents could hurt Tesla’s bottom line, as customers may think twice about purchasing a vehicle that could be targeted in politically charged attacks.

“When people are worried that their Tesla might get vandalized or set on fire, even those who were previously indifferent to Musk’s politics might hesitate before buying one,” Kallo explained.

Musk’s Insouciance Isn’t Fading as Investors Prepare to Step In

For months, Musk has brushed off criticism, seemingly unfazed by Tesla’s stock decline and growing brand troubles. His nonchalant attitude has frustrated investors, many of whom have urged him to refocus on Tesla’s core business rather than engaging in politically charged battles.

However, as Tesla’s market cap continues to shrink, the pressure is building for investors to step in and demand changes. Institutional shareholders, including large investment funds and pension funds, have started raising concerns about Musk’s leadership and the direction of the company.

In a sign of growing tensions, Tesla board members have reportedly been in discussions about whether Musk should scale back his involvement in political affairs and devote more attention to stabilizing Tesla’s plummeting stock price. However, Musk has so far given no indication that he plans to change course.

Trump’s Public Show of Support for Tesla

Against the backdrop of Tesla’s stock freefall, President Trump sought to show solidarity with Musk on Tuesday, publicly stating that he planned to purchase a Tesla vehicle to demonstrate his support for the company.

While Trump’s backing could shore up support among conservative consumers, it may further alienate progressive and environmentally conscious buyers, deepening Tesla’s branding crisis. Political polarization has rarely benefited consumer brands, and analysts warn that Musk’s refusal to distance himself from Trump’s administration could ultimately cost Tesla more than it gains.

First, I only buy stocks in the US during recessions and I know the sector I focus on. That sector is the first to be “bailed out” as the government relaxes all known rules to make the industry profitable, so that other sectors will come along. You can never go wrong, as for more than 50 years, all US governments have used one tool to fight recession, and that sector has always benefitted.

In Dec 2024, I sold all my positions after Trump returned. I am a Democrat and always think Reublications will find ways to crash the economy with a recession, natural luck, big tax cuts and the typical. So, as I write, I have zero US stocks. I hope we do not have a recession, but if it does happen, I will be greedy to bounce.

But as everything happens in this young Trump 2.0 Presidency, one person I do not understand anymore is Elon Musk. He sells a product named Tesla which mainly the liberals in America and Europe buy. But he goes after them daily. Does he think anyone in Alabama, West Virginia, etc cares to drive a Tesla? Without CA, MA, NY, MD, etc there may not be Tesla today. How? Those states offer generous tax rebates for EV cars and they fueled Tesla ascension as the only major EV producer in the US. California offered EV tax credits before the US government. In other words, CA gave Tesla “free” cash as it shaped buying decisions.

But Musk seems to always fight with these customers and their leaders. Get me right: when I see an own-goal, I know one even before the referee calls.  You see, what does this village boy know when billionaires are playing their games? You are correct: I do not understand how a man who owns Tesla will always fight with blue states. Sure, Trump wants to buy a new Tesla as the company’s valuation takes a heat: “President Donald Trump has pledged to buy a new Tesla vehicle to show his support for Elon Musk, as the electric carmaker struggles with a stock market crash, declining sales, and intensifying protests.”. A presidential buy could do the magic. Good luck, Elon.

After soaring for years, Tesla’s stock has tumbled over 50% from its recent highs, breaking away from the so-called “Musk trade” that’s lifted the billionaire’s other companies. While investors appear to be buying Elon Musk’s vision of robotaxis and artificial intelligence, analysts say Tesla shareholders are concerned about Musk “being spread too thin,” given his focus on cutting government spending, along with growing stigma around the brand. Tesla’s profits have plunged in several countries amid increased competition, particularly in China.

President Donald Trump has pledged to buy a new Tesla vehicle to show his support for Elon Musk, as the electric carmaker struggles with a stock market crash, declining sales, and intensifying protests.

“To Republicans, Conservatives, and all great Americans, Elon Musk is “putting it on the line” in order to help our Nation, and he is doing a FANTASTIC JOB! But the Radical Left Lunatics, as they often do, are trying to illegally and collusively boycott Tesla, one of the World’s great automakers, and Elon’s “baby,” in order to attack and do harm to Elon, and everything he stands for,” Trump said.

He added that “they tried to do it to me at the 2024 Presidential Ballot Box.”

“In any event, I’m going to buy a brand new Tesla tomorrow morning as a show of confidence and support for Elon Musk, a truly great American. Why should he be punished for putting his tremendous skills to work in order to help MAKE AMERICA GREAT AGAIN???”

The announcement, made on Trump’s Truth Social platform on Tuesday, came amid what his allies have termed the “Tesla Takedown”, a reference to the growing demonstrations against Musk’s role in implementing massive cuts to the federal workforce under the Trump administration.

Trump’s endorsement of Tesla appeared to provide a temporary lift to the company’s stock, which rebounded 5% in premarket trading after suffering its worst single-day decline in over four years on Monday.

However, industry experts argue that while Trump’s symbolic gesture may help bolster Musk’s public image among conservative supporters, it does little to address the real challenges Tesla is facing. Many have pointed out that if Trump truly wanted to help Tesla and the broader electric vehicle (EV) industry, he would need to reverse his administration’s aggressive rollback of pro-green energy policies, which had been boosting EV sales under the previous administration.

Tesla, once a dominant force in the EV market, is experiencing an unprecedented period of turmoil, with its stock price, sales, and brand reputation all taking major hits. Musk’s increasingly controversial political activity, particularly his leadership of the Trump administration’s Department of Government Efficiency (DOGE), has alienated large portions of Tesla’s customer base and sparked a wave of anti-Tesla protests across the U.S.

Last week, 350 demonstrators gathered outside a Tesla showroom in Portland, Oregon, condemning Musk’s role in eliminating thousands of government jobs. Earlier this month, a Tesla dealership in New York City was the site of another demonstration, where nine people were arrested after tensions escalated. Protesters argue that Musk’s deep involvement in Trump’s efforts to dismantle federal agencies and reduce public sector employment is a direct betrayal of Tesla’s original image as a forward-thinking, progressive company.

The backlash has translated into declining consumer interest in Tesla, particularly in states and countries that have traditionally favored green energy policies. According to a report from Bank of America, Tesla’s vehicle sales in Europe plunged by 50% in January compared to the previous year. The report attributed the drop in part to growing unease over Musk’s politics, as well as delays in the release of a redesigned Model Y.

Trump defended Musk, saying the billionaire was “putting it on the line” to help the country and was doing a “fantastic” job. Musk responded on his own platform, X, thanking Trump for his endorsement.

Trump’s EV Policies Contradict His Support for Tesla

While Trump’s public embrace of Tesla and Musk has been celebrated by many of his supporters, it is believed that his administration’s aggressive rollback of pro-EV policies is actively harming the industry, including Tesla itself.

Since taking office in January 2025, Trump has dismantled nearly all of the Biden-era policies that were fueling EV adoption in the U.S.

Among the most damaging reversals are:

• Eliminating federal EV tax credits: Under Biden, consumers could receive up to $7,500 in tax credits for purchasing an electric vehicle. These incentives helped drive demand for Tesla and other EV brands. Trump’s decision to terminate these credits has made EVs less affordable, discouraging buyers.
• Defunding EV charging infrastructure: The Biden administration had earmarked billions of dollars to expand the national EV charging network, making it easier for Americans to transition from gas-powered cars. Trump slashed this funding, significantly stunting infrastructure growth.
• Rolling back emissions standards: Biden had imposed strict emission reduction targets that pushed automakers to prioritize EV production. Trump has reversed these regulations, allowing companies to slow down EV development and extend the lifespan of gasoline-powered vehicles.
• Removing federal fleet EV mandates: The previous administration had committed to converting the entire federal vehicle fleet to electric cars, a move that would have resulted in major contracts for Tesla and other EV makers. Trump scrapped the plan, eliminating what could have been a lucrative revenue stream for the industry.

Industry analysts argue that while Trump’s symbolic support for Tesla may boost Musk’s morale, it cannot compensate for the material damage his policies are causing to the electric vehicle market.

Tesla’s stock has suffered a dramatic collapse since reaching its all-time high of $1.5 trillion in market capitalization on December 17, 2024. The company has now lost more than 50% of its value, erasing most of the gains it made following Musk-backed Trump’s electoral victory in November.

The decline has been fueled by a combination of falling sales, growing brand toxicity, and investor concerns that Musk’s political distractions are preventing him from properly managing Tesla.

On Monday, Tesla shares experienced their biggest single-day drop since September 2020, dragging the Nasdaq down nearly 4%, its worst decline in years. Analysts warn that unless Tesla can stabilize its business and repair its reputation, the company’s downward spiral may continue.