Tesla Stock Plummets Amid Investor Concerns Over Musk’s Focus
New York, NY – Tesla (TSLA) CEO Elon Musk, who also leads the Department of Government Efficiency (DOGE), has been asking government employees to report their weekly accomplishments. However, Tesla investors are now asking the same of Musk, as the company’s stock struggles in 2024.
Tesla Stock Decline and Market Impact
Tesla shares have dropped 28% year to date, nearly erasing all gains since President Trump’s election victory on Nov. 5. The stock, which closed at $251.44 on Election Day, surged to a record high of $479.86 on Dec. 17 before falling sharply. Tesla has also slipped below the $1 trillion market cap threshold.
Musk’s alignment with Trump was seen as a strategic move, granting Tesla greater access to the administration and reducing regulatory obstacles for its self-driving and autonomous vehicle initiatives. However, Tesla’s stock has plummeted 39% since its December peak.
Factors Behind Tesla’s Stock Slump
Several challenges have contributed to Tesla’s decline:
- Weak Earnings and Deliveries: The company’s fourth-quarter performance underwhelmed, and annual deliveries declined for the first time in its history.
- Regulatory Scrutiny: In January, the National Highway Traffic Safety Administration (NHTSA) launched an investigation into Tesla’s autonomous features, adding to existing probes.
- Cybertruck Demand Issues: The highly anticipated Cybertruck faced pricing concerns and lower-than-expected demand.
- European Sales Decline: Tesla saw a significant drop in European sales in early 2024.
- Musk’s Political Controversies: Musk’s political activities, both in the U.S. through DOGE’s policies and internationally, where he has been linked to far-right movements, may be alienating customers and investors.
Additionally, Musk’s political involvement has raised concerns about his focus on Tesla, with some questioning whether he is devoting enough attention to the company’s operations.
Historical Volatility and Future Outlook
Tesla stock has historically been volatile, with past declines of 20-30% not uncommon. Seasonal trends also show that Q1 and Q3 tend to be weaker periods for the stock. However, multiple factors are contributing to the current downturn, forming a “perfect storm” for investors.
Despite the challenges, there are reasons for optimism. Tesla recently introduced a refreshed version of its top-selling Model Y, plans to unveil a more affordable electric vehicle in the first half of the year, and is set to begin paid, unsupervised robotaxi testing in Austin, Texas, in June.