Musk’s Power Peaks While Tesla Stock Faces Market Test

Tesla’s stock has hit its lowest point since November. The price crashed 15% to $215, marking its worst trading day since 2020. The company still holds an $845 billion market value, which is a big deal as it means that the combined worth of the next nine largest automakers. Recent market performance shows serious challenges ahead. The sharp decline wiped out almost half of Tesla’s market value, dropping from $1.54 trillion to around $777 billion within months.

Tesla remains the automotive sector’s leader, but current stock trends worry investors. The company’s stock has fallen 36% this year. However, it still shows a 54% gain in the last 12 months. Sales numbers look troubling too. Tesla’s deliveries in China fell 49% in February compared to last year, hitting their lowest monthly numbers since July 2022. Many investors now question Tesla’s premium valuation, as the company’s forward price-to-earnings ratio is more than nine times higher than its closest competitors’ average.

Musk Gains Political Clout as Tesla Stock Plummets

“Despite the best efforts of Trump and many of his political allies, most Americans have not forgotten about what happened that day” — Elon Musk, CEO of Tesla and SpaceX, owner of X (formerly Twitter)

Elon Musk’s political influence has soared to new heights after Donald Trump’s election victory, while Tesla battles increasing market challenges. The world’s wealthiest person has become a powerful figure in Trump’s administration. He shapes cabinet choices and participates in discussions with global leaders.

White House Showcases Tesla Vehicles Amid Stock Decline

President Trump turned the White House South Lawn into a Tesla showroom and personally inspected five Tesla vehicles. He chose a red Model S for White House staff use. This public support came at a vital moment. Tesla’s stock had dropped 15% the previous day – its worst performance since 2020. The showcase helped the company’s shares recover by 4%.

How DOGE Appointment Amplifies Musk’s Influence

The Department of Government Efficiency (DOGE), with Musk as co-leader, has changed federal operations completely. DOGE operates without congressional oversight and has made sweeping changes in government agencies. The department claims it found AED 367.19 billion in government savings under Musk’s leadership. DOGE now has access to data from over 20 government agencies.

The department’s actions have created controversy through:

• The dismissal of 25,000 federal employees
• The restructuring of major agencies including NASA and the FAA
• The complete dismantling of USAID

Trump Promises Protection for Tesla Against Vandalism

Trump has taken strong action to protect Tesla amid growing protests and vandalism at its facilities. He declared that attacks on Tesla’s properties would be treated as domestic terrorism. This announcement came after several incidents, including arson attempts at Tesla’s service center in Loveland, Colorado.

The backlash against Musk’s government role has hurt Tesla’s global performance. The company’s sales dropped 76% in Germany, its largest European market. A Morgan Stanley survey shows 85% of investors believe Musk’s political activities have damaged Tesla’s business fundamentals.

Musk continues to grow his political influence worldwide despite these challenges. He supports conservative politicians in many countries, including Germany’s Alternative for Germany party. His political activities now reach 18 countries across six continents, with Antarctica being the only exception. Musk met with Indian Prime Minister Narendra Modi recently, blending his political and business interests.

Why Tesla Stock Falls Despite Musk’s Rising Power

Tesla’s market performance has hit rock bottom as sales drop in major global markets. The company’s shares fell 45% in 2025, which marks its longest losing streak since going public on Nasdaq in 2010.

Global Sales Decline Hits Revenue Projections

Sales numbers paint a worrying picture in key markets. Tesla saw a 45% drop in European sales during January, while overall electric vehicle sales went up. Germany and France took the biggest hits with sales falling about 60% in each country. Sales of Tesla’s Model 3 dropped 33% throughout European markets.

Investors Question Musk’s Divided Attention

A Morgan Stanley survey of 245 investors shows growing worries about Tesla’s leadership. The survey reveals that 85% of investors think Musk’s political activities have either a “negative” or “very negative” effect on business fundamentals. The outlook seems grim as 59% of investors expect fewer car deliveries in 2025.

These concerns show up in Tesla’s financial results. The company’s net income dropped 71% from last year to AED 8.52 billion. Automotive revenue disappointed analysts by falling 8% to AED 72.70 billion.

Political Backlash Triggers Consumer Boycotts

Musk’s political activities have sparked various protests from consumers. People have vandalized Tesla showrooms across the United States, and cars now sport bumper stickers saying “I bought it before Elon went nuts”. The survey suggests 21% of respondents think sales will drop by more than 10%.

Problems reach beyond North America. Tesla’s February sales in China fell by almost half compared to last year. UBS Evidence Lab data shows quick delivery times for Model 3 and Model Y in major markets, which hints at weaker demand. Analysts link this trend partly to Musk’s political views, noting that Tesla’s typical buyers – wealthy, progressive consumers – might feel put off by recent events.

How Political Alliances Create Double-Edged Sword for Tesla

“X and Musk are raising the temperature of politics dangerously and irresponsibly at a critical moment” — Heidi Beirich, Co-founder of the Global Project Against Hate and Extremism

Tesla’s ties to the Trump administration create both opportunities and risks for the electric vehicle maker. The company now deals with growing pressure as its relationship with President Trump sets off complex market reactions from consumers.

Trump’s Tariff Policies Affect Tesla’s Global Operations

Tesla has warned about possible damage from other countries’ retaliatory tariffs in response to Trump’s trade policies. The company wrote to the U.S. Trade Representative about American exporters facing “disproportionate impacts” when nations hit back at U.S. trade actions. Tesla tries to get supplies locally, but some parts remain “difficult or impossible to source within the United States”.

These trade tensions show their effects in several ways:

• Higher tariffs on electric vehicles in countries targeted by U.S. trade actions
• Construction delays at Gigafactory Mexico because of political uncertainty
• Supply chain problems that raise production costs

Regulatory Benefits vs. Brand Perception Costs

Tesla’s political stance comes with major brand implications. A Strategic Vision survey shows Democrats, who make up most EV owners, now choose other brands over Tesla. Tesla owners have responded in unexpected ways. Many now put bumper stickers on their cars saying “I bought it before Elon went nuts”.

The brand’s reputation has fallen hard and fast. JPMorgan analysts say they “struggle to think of anything analogous in the automotive industry, in which a brand has lost so much value so quickly”. Tesla’s net favorability rating has dropped to its lowest ever at 3%.

British Columbia officials have cut Tesla off from subsidies. Protests have broken out at Tesla showrooms worldwide. A guerrilla poster campaign in the UK uses provocative slogans like “0 to 1939 in 3 seconds”. These events show how Tesla’s political connections increasingly shape its market position and financial results.

Tesla Faces Intensifying Competition While Musk Focuses Elsewhere

BYD has emerged as Tesla’s strongest rival in an increasingly competitive electric vehicle market. The Chinese automaker’s sales doubled Tesla’s numbers in January, while Tesla saw an 11% decline. BYD’s global reach expanded with record-breaking sales of 66,000 vehicles beyond China’s borders. The company overtook Toyota in Singapore and surpassed Tesla in the UK.

Chinese EV Makers Capture Market Share

China’s EV sector now has 123 automakers selling electric vehicles. BYD stands at the forefront of this competitive market through aggressive pricing and advanced technology. Chinese manufacturers plan to launch 71 new battery electric models this year.

BYD Offers Free Self-Driving Features

BYD made a bold move by blending its “God’s Eye” advanced driver-assistance system into 21 models without extra costs. The system comes in three versions:

• Models under AED 110,447.16 get a simple version that supports highway autonomous driving
• Premium versions handle complex urban traffic
• Every version includes automated parking and lane-keeping features

This strategy differs from Tesla’s approach, where Chinese customers pay AED 32,313.08 to get self-driving capabilities.

Traditional Automakers Accelerate EV Transitions

Established car manufacturers face unique challenges in their shift to EVs. Ford lost AED 132,189.86 on each electric Ford Lightning pickup. GM invested AED 727.04 million in lithium supply deals starting 2025. Volkswagen created mutually beneficial alliances with Canada to secure lithium, nickel, and cobalt.

These manufacturers struggle with:

• Old business models that can’t adapt to customer priorities
• Problems adopting new EV production technologies
• Difficulty making modern, tech-integrated vehicles quickly

The market continues to shift as Chinese brands like NIO, XPeng, MG, and ORA expand worldwide with affordable electric and hybrid options. Electric vehicles could make up 45% of cars on Chinese roads by 2025, compared to 25% in Europe and 11% in the U.S..

Tesla faces a stark reality between Elon Musk’s political rise and the company’s market performance. The electric vehicle giant’s stock value has plunged from $1.54 trillion to $777 billion. BYD has become a tough rival that sells twice as many EVs as Tesla did in January, which shows a fundamental change in the competitive scene.

New political ties have created major roadblocks for Tesla’s business. Sales have taken a hit in Europe, China, and North America because of customer boycotts, especially when you have traditionally progressive EV buyers turning away. Regulatory hurdles and trade tensions make things worse. Tesla’s brand value has dropped faster than expected, and its net favorability rating stands at just 3%.

The car industry keeps evolving as traditional car makers speed up their switch to EVs. Chinese manufacturers are pushing hard into new markets with advanced features and better prices. Tesla’s falling sales numbers and Musk’s split focus raise doubts about the company’s future market dominance.

Tesla’s path to success ended up depending on how well it can balance political relationships with day-to-day excellence. The mix of stronger competition, angry consumers, and global market challenges definitely calls for a fresh look at where the company is headed and how it should be led.