Tesla experienced its biggest one-day stock market drop since September 2020 when its value fell by 15% on Monday. Since its initial public offering in 2010, Tesla has endured its longest losing period of seven straight weeks after its stock prices decreased for seven weeks in a row.
Tesla stock prices reached their highest point at $479.86 on December 17 before experiencing more than a 50% decline, which resulted in a loss of over $800 billion in market value. The Nasdaq experienced its worst two-year decline after Monday’s market downturn when Tesla’s stock value dropped by 15% as the company suffered its most severe daily decline since September 2020.
The economic and political instability has become a major factor behind Tesla’s falling market value. CEO Elon Musk’s position as Trump administration leader of the Department of Government Efficiency has led to widespread criticism. His political activities and aggressive speech on X (formerly Twitter) caused many previous Tesla backers to distance themselves from his company. The brand image of Tesla has faced significant deterioration, according to reports, particularly in Europe, since new vehicle sales plummeted by 50% in January compared to the previous year.
The current trade tensions create additional difficulties for Tesla’s business operations. The proposed tariff policies from President Trump create risks for Canadian and Mexican supply chains that could lead to higher manufacturing expenses. The company has experienced rising incidents of vandalism, including multiple arson attempts at its facilities, which have been particularly frequent in Colorado. The combination of negative public opinion and safety-related issues might prevent potential customers from making purchases.
The Model Y from Tesla holds the title as the leading electric vehicle in worldwide sales. The company faces additional obstacles from Chinese manufacturer Geely Geome’s growing presence and changing customer preferences. The global EV market shows steady growth at a 21% annual rate, yet Tesla faces increasing competition for its market leadership position.
The future of Tesla remains unclear to investors because they do not know if the company can bounce back from its recent decline or if its current challenges signal permanent changes for its business.
