Tesla’s shares dropped 8%, erasing much of the post-election gains due to concerns over Elon Musk’s political activities and declining sales. Investors are worried about the impact of Musk’s endorsements and lack of a clear strategy to counter falling market share, particularly in Europe where sales fell 50%. This decline threatens Tesla’s market value and Musk’s wealth, as much is tied to stock performance.
Tesla’s stock suffered an 8 percent decline, effectively negating much of the rally experienced following Donald J. Trump’s election victory. Initially, investors were optimistic that Mr. Musk’s substantial financial contributions to the Trump campaign would result in favorable outcomes for Tesla, particularly regarding regulatory approvals for autonomous vehicle technology.
However, growing concerns regarding Mr. Musk’s political involvement have arisen. Investors are alarmed that he is dedicating excessive time to political activities while Tesla’s sales are notably decreasing. Furthermore, his endorsement of far-right politics has raised apprehensions that he may alienate potential customers, with reports of significant declines in Tesla sales.
The decline in Tesla shares, currently valued at $302.80, has brought the company’s market capitalization below $1 trillion. This downturn is particularly concerning for Mr. Musk, as his wealth is primarily concentrated in Tesla stock. The failure to present a strategy addressing Tesla’s waning market share in critical regions has also created unrest among investors and employees alike.
Recent data revealed that Tesla’s sales in Europe have plummeted by 50 percent in January compared to the previous year, occurring despite a robust market for electric vehicles, which rose by 34 percent. Such a sharp decline in sales in a growing market has intensified investor anxiety about the company’s long-term viability and market position in both the U.S. and overseas.
In summary, Tesla’s stock decline reflects broader concerns about Elon Musk’s corporate focus amidst political involvement. Investors are anxious about declining sales in crucial markets, accentuated by recent disappointing numbers from Europe. Furthermore, the potential alienation of customers due to Mr. Musk’s political endorsements further complicates the company’s outlook, threatening its market standing and the personal wealth of its CEO.
Original Source: www.nytimes.com
