There’s no way to ignore the fact that Tesla stock’s growth has stalled. The question is, can it regain its previous momentum?
As the 2024 U.S. presidential election approached in November 2024, (TSLA) stock enjoyed significant momentum, as CEO Elon Musk’s proximity to Trump sparked investor enthusiasm.
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Lately, however, while Musk has been seemingly preoccupied with his new responsibilities at the so-called Department of Government Efficiency (DOGE), shares have been steadily declining.
Tesla is far from the only big tech stock struggling as uncertainty among investors continues to rise. Its peers, such as Nvidia (NVDA) , Amazon (AMZN) , and Microsoft (MSFT) , have all been in the red for the past month and have not shown signs of a rebound.
However, the fact that the CEO of an industry-leading company seems to be busy with other things is raising speculation regarding Tesla’s future as multiple factors impede its growth.
Elon Musk has been facing problems lately as Tesla stock continues to trend downward amid declining European sales. Photo by Apu Gomes/Getty Images)
Tesla stock is falling, and investors are wondering: where is Elon Musk?
Of course, no one is actually wondering where Musk is. A quick look at any news platform reveals that he’s been busy making changes to the U.S. Federal Government at the DOGE, which has also been his preferred topic to post about on social media lately.
However, since Musk began shifting his focus away from his companies, things have changed for Tesla and not for the better. The stock recently fell so far that it lost its trillion-dollar market capitalization, rendering it less valuable than both Broadcom (AVGO) and Taiwan Semiconductor Manufacturing (TSM) .
Related: Angry Tesla owners threaten to take action against Elon Musk
Part of this momentum is likely due to negative Tesla sentiment surrounding the company in a key international market. According to InsideEVs, while electric vehicle (EV) sales are rising across Europe, Tesla sales are declining.
“Tesla sales plummeted in the EU last month, falling by a whopping 45.2%. It sold just under 10,000 cars versus over 18,000 in January 2024, and its market share fell from 1.8% to 1% this year,” the outlet reports.
This seems to be due to anger towards Musk, who is accused of making an inappropriate gesture on stage during Trump’s inauguration.
Just how significant are Tesla’s problems in Europe, though? TheStreet spoke to multiple experts to find out if these negative impacts are likely to persist.
David Materazzi, founder and CEO of Galileo FX, shared context from Italy. “The very second Musk stepped into his new role, Tesla stepped down. People aren’t just selling their cars here… they’re making a statement. That’s a brand in free fall.”
He adds that, based on his experience, when Europe turns on a brand, other nations are likely to follow. “Lose Europe, lose your edge,” he states. “Investors bet on the future. Right now, I truly believe that Tesla’s future is a mess.”
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Alejandro Zambrano, Chief Market Strategist at ThinkMarkets, doesn’t believe that this anti-Tesla sentiment will spread beyond Europe, with the possible exception of Canada. He highlights that the U.S. and China are more important markets but notes that “the latest drop in European car sales is a blow to Tesla and directly relates to Elon’s political work and views.”
Can Tesla rejoin the trillion-dollar club?
With Tesla slipping further and further beyond its peers by market cap ranking, including a few who aren’t part of the Magnificent 7, investors are likely wondering when the company will return to its place in the market’s most elite rankings and if it even can.
Related: Tesla may have lost the self-driving war in China before it began
John Engle, president of Almington Capital Merchant Bankers, notes that Tesla has claw its way back to the trillion-dollar club before, suggesting it could do it again in the right circumstances. However, he acknowledges that conditions for Tesla appear to be worse this time, stating:
“Tesla faces mounting economic and market pressures while intensifying competition and increasing market saturation have weighed on sales. Even big price cuts have failed to lift domestic demand significantly, while demand in key foreign markets like Europe have fallen off a cliff.”
Another expert offers some hope to investors who may be concerned about Tesla’s declining EV sales. David Nicholson, chief technology advisor at The Futurum Group, argues that if Tesla is able to reach a trillion-dollar market cap again, it will be through its artificial intelligence (AI) endeavors, not EVs.
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