Tesla's share price experienced a significant decline, falling over 8% by 1:20 p.m. EST on Tuesday. This downturn comes in the wake of reports indicating a dramatic 45% drop in Tesla's sales across Europe over the past month. This decline is notable as rival electric vehicle companies are witnessing increased demand. The drop in sales has contributed to a nearly $15 billion reduction in Elon Musk's net worth.
The sharp decrease in Tesla's stock price was triggered by a report from Bloomberg, highlighting the company's struggles with European sales. This comes at a time when Musk has been increasingly involved in politics, acting as a key advisor to President Donald Trump in the U.S. Moreover, Musk has openly supported far-right political parties in Europe. In January 2025, Germany recorded the lowest monthly registration of new Tesla cars since July 2021. Similarly, France saw its lowest numbers since August 2022.
According to a note from Wedbush, led by analyst Daniel Ives, Tesla's stock has been under pressure since the beginning of the year. The note attributes this to Musk's political involvement within the Trump administration, particularly his role in the Department of Government Efficiency (DOGE) initiative. "The street perceives a downside impact on Tesla shares due to Musk's dedication to the DOGE initiative," the note states. It also highlights concerns that Musk's political activities could alienate some consumers, although these are considered "containable brand issues" rather than major concerns for Tesla.
Elon Musk has assumed an unofficial leadership role in Trump's administration, heading the Department of Government Efficiency. This department aims to reduce government spending and waste. However, Musk's strategies have sparked controversy, especially as the government has moved to lay off numerous federal probationary employees and adopted tactics Musk used during his takeover of Twitter, now known as X. These actions have drawn criticism from Democrats and have resulted in several lawsuits and legal challenges against both Musk and Trump since January.
