Updated at 1:25 PM EST
Tesla shares moved lower in mid-day Monday trading, extending their 2025 decline well past 10%, as investors continue to fret about the time and attention that Elon Musk is devoting to his efforts as a key adviser to President Donald Trump.
Tesla (TSLA) shares had a historic post-election run thanks in part to Musk’s close ties to the President and the assumption that business-friendly policies would boost the value of his myriad companies.
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The stock has fallen hard since mid-December, however, amid a disappointing set of fourth quarter earnings, the first year-on-year sales decline on record and slumping early 2025 deliveries in key overseas markets.
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Recent polling also suggests that Musk’s role in the Department of Government Efficiency, or DOGE, is starting to weigh on his personal brand.
A Washington Post-Ipsos poll, published over the weekend, showed Musk had a net approval rating of just 34% for his DOGE efforts, which have included inaccurate statements on savings and the sharing of misinformation on his X social media platform.
Elon Musk’s efforts as President Trump’s cost-cutter-in-chief have parallelled a big decline in Tesla stock.
Wedbush analyst Dan Ives, a longtime Tesla bull, has argued on many occasions that Musk “has always been able to balance his countless initiatives better than any other CEO we have seen.”
He made that case again in a note published Monday, which reiterated his outperform rating and $550 price target, by presenting a case that “Tesla is accelerating into an autonomous/ robotics future despite growing skepticism around Musk’s DOGE balancing act.”
Crucial moment for Tesla: Wedbush
“The worry of [Wall] Street is that Musk dedicating so much time (even more than we expected) to DOGE takes away from his time at Tesla in such a crucial moment and year for the company,” Ives said.
“The autonomous and robotics battle for market share is in full force both in the US and China, and many on [Wall] Street view Musk spending ‘100% of his time’ with Doge as creating a negative perception around his Tesla focus,” he added.
Investors have undoubtedly been concerned with the amount of time Musk has spent on his activities as a key adviser to the president and his role with the cost-cutting group empowered by the White House.
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But many others have noted that Tesla’s longer-term underperformance, compared with the Nasdaq 100, over the past four years is tied more closely to its declining lead in the EV market and its narrowing profit margins.
Tesla, having once boasted of delivering 20 million units a year by 2030, now pegs that total at around 5 million, its Cybertruck has also failed to capture the public’s imagination and its overseas sales are tanking amid increasing competition and brand erosion tied to Musk’s political activities.
Tesla’s overseas sales are slumping
Tesla’s China sales last month fell to 63,238 units, off 11.5% from a year earlier, while domestic rival BYD (BYDDY) saw a rise of 47.5% to 296,446 units. Sales in Germany, meanwhile, where Musk pledged support for the far-right AfD party heading into Sunday’s federal elections, plunged 59.5%.
That puts the group’s recent drawdown, which has lopped more than $300 billion of market value since mid-December, in stark focus.
“Tesla is gearing up for a new mass-market-vehicle launch in [first-half 2025], making major product developments around autonomous/Optimus [robots] across its global production ecosystem,” Ives argued. The analyst noted that Full-Self-Driving tests are slated to launch this spring in Tesla’s Austin hometown.
More Tesla:
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“We believe a new vehicle launch in the coming week, with Model Y Juniper along with the Austin FSD unsupervised kickoff in June, will be key events and catalysts,” Ives said. All this “as investors focus on Tesla’s next chapter of growth and [Wall] Street adjusts to a Musk that will successfully (in our view) balance his Tesla CEO role along with Doge, SpaceX, xAI and myriad other initiatives.”
Tesla shares were marked 0.005% lower in early afternoon trading to change hands at $337.75 each, pegging the stock’s year-to-date decline to around 13%.
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