While Elon Musk has been generating headline after headline for his efforts to reshape the US federal workforce, the stock of his electric-car company just suffered its worst weekly performance since October.
Tesla Shares Tumble 11% Amid Shocking Sales Reports
Tesla shares tumbled about 11 per cent this week, weighed down by shockingly bad sales reports from around the world. In Germany, sales plunged last month to the lowest since 2021, and they tumbled in France and the UK as well. The news from China, one of Tesla’s biggest markets, is also bleak. Deliveries fell 11.5 per cent year over year – while the shares of Chinese competitor BYD Co notched their best week since 2020 as investors cheered an update to its smart-driving technology.
Tesla’s Stock Performance
The battering has left Tesla’s stock down 25 per cent from its Dec 17 record closing high. It reached that peak after nearly doubling in the wake of Donald Trump’s election victory, as Musk established himself as the president’s right-hand man. That honeymoon has given way to the day-to-day reality of running an electric-vehicle maker at a time when the new administration’s policy is turning away from the industry, and as Musk has become an increasingly polarising figure.
Is Musk’s Political Leanings Affecting Tesla’s Performance?
The European sales weakness may signal that Musk’s political leanings are affecting Tesla’s performance. In recent months, he embraced a far-right party in Germany and picked a fight with the UK prime minister ahead of results showing that sales fell in Europe’s three largest markets. In early February, Trump boosted tariff threats on the European Union while engaging in brinkmanship over levies against Canada and Mexico.
“There is an argument to be made that Tesla is beginning to be penalised for Musk’s close relationship to Trump,” Mike O’Rourke, chief market strategist at Jonestrading, wrote in a note.
Investor Sentiment
Of course, some investors hope that Musk’s proximity to the president will benefit the carmaker, for example, by helping ease the regulatory pathway for his ambition to develop a self-driving car.
Market Outlook
But for now, Tesla’s stock is the biggest laggard this year among firms in the Bloomberg Magnificent Seven Index, which tracks the megacap tech-related shares that have been the source of much of the market’s strength. It’s also the most expensive to hold in that group, with a valuation that’s roughly three times as high as the rest of the cohort, even after its recent slump.
Some market-watchers say there could be further downside ahead for Tesla and that investors should wait to jump in.
Tesla’s stock has suffered its worst weekly performance since October, weighed down by shockingly bad sales reports from around the world. While some investors hope that Musk’s proximity to the president will benefit the carmaker, others are warning of further downside ahead.
Q: Why did Tesla’s stock suffer its worst weekly performance since October?
A: Tesla’s stock suffered its worst weekly performance since October due to shockingly bad sales reports from around the world.
Q: Will Musk’s political leanings affect Tesla’s performance?
A: Some market-watchers believe that Musk’s political leanings are affecting Tesla’s performance, citing the company’s poor sales reports in Europe and China.
Q: What is the outlook for Tesla’s stock?
A: Some market-watchers are warning of further downside ahead for Tesla, while others believe that the stock could recover in the coming weeks.
