March 10, 2025 | By FlashpointNews Team
Tesla’s stock suffered its worst single-day drop since September 2020 on Monday, plunging 15% and continuing a seven-week losing streak. The electric vehicle (EV) giant has now lost more than half its value since its peak on December 17, 2024, wiping out approximately $800 billion in market capitalization.
The latest decline comes amid growing uncertainty surrounding tariff policies under the Trump administration and mounting backlash against CEO Elon Musk’s political involvement and controversial rhetoric.
What’s Behind Tesla’s Stock Slide?
1. Tariff Uncertainty
The Trump administration’s plans to increase tariffs on key automotive markets like Canada and Mexico have raised concerns about higher production costs and potential trade wars. These factors could lead to increased vehicle prices and reduced demand for Tesla’s EVs.
2. Brand Erosion
Elon Musk’s role in the Trump White House, where he heads the Department of Government Efficiency, has alienated some customers and investors. His incendiary political rhetoric and promotion of false Kremlin talking points about Ukraine President Volodymyr Zelenskyy have further damaged Tesla’s brand image.
3. Protests and Vandalism
Activists and former Musk supporters have staged protests at Tesla facilities across the U.S., with reports of vandalism and arson attempts at dealerships and service centers. In Loveland, Colorado, a Tesla store was recently targeted, according to local police.
Analyst Ben Kallo of Baird noted that such incidents could deter potential buyers: “When people’s cars are in jeopardy of being keyed or set on fire, even Musk supporters might think twice about buying a Tesla.”
Global Sales Decline
Tesla’s struggles aren’t limited to the U.S. In Europe, new vehicle sales plummeted 50% in January 2025 compared to the previous year, according to Bank of America. While the Model Y remained the best-selling battery electric vehicle globally, competitors like China’s Geely Geome are gaining ground.
Despite the decline in Tesla’s sales, global EV sales (including plug-in hybrids) grew 21% in January, driven by strong demand in Europe.
Elon Musk’s Controversial Role
Musk’s involvement in the Trump administration has been a double-edged sword. While his efforts to streamline government operations have earned praise from some quarters, his polarizing statements and actions have sparked widespread criticism.
From attacking judges on his social network X to promoting Kremlin propaganda, Musk’s behavior has fueled protests and damaged Tesla’s reputation.
What’s Next for Tesla?
Tesla faces significant challenges in 2025, including:
- Regulatory Risks: Potential trade wars and tariff hikes could impact production and sales.
- Brand Recovery: Rebuilding trust with customers and investors will be crucial.
- Competition: Rivals like Geely and traditional automakers are closing the gap in the EV market.
Despite these hurdles, Tesla remains a leader in the EV industry, with the Model Y continuing to dominate global sales. However, the company’s ability to navigate these challenges will determine its future trajectory.
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