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Elon Musk’s post-election honeymoon at Tesla appears to be over.
In the weeks after Musk went all-in on Donald Trump and came out on the winning side, the billionaire’s net worth jumped an estimated $170 billion as Tesla stock soared.
But now the EV maker is struggling with declining global sales, tariff fears, and potential backlash to its CEO’s political views.
The year got off to a rough start, as the company reported that in 2024 it experienced its first annual drop in deliveries. The bad news continued in January, with key markets flashing warning signs for the EV maker.
Tesla sales in France plunged 63 percent last month over the previous January, and sunk 59.5 percent in Germany in the same month-to-month period amid a backlash against Musk over his support for the far-right Alternative for Germany (AfD) party. That was the worst January since 2021 for Tesla sales in Germany.
Sales were also down in the UK.
In China, one of the company’s largest markets, sales were down 11.5 percent in January year-over-year, while Tesla’s Chinese rival BYD hit a nearly 50 percent increase during the same period.
In markets with high concentrations of EVs like Sweden and Norway, the indications were little better. New Tesla registrations were down 44 percent compared to last year in the former, and 38 percent in the latter, despite high demand for cars in both countries.
The sales, combined with the Trump White House tariff threats around the world, has some investors arguing Musk and Tesla are experiencing a Trump-lash.
“There is an argument to be made that Tesla is beginning to be penalized for Musk’s close relationship to Trump,” Mike O’Rourke, chief market strategist at Jonestrading, wrote in a research note, Bloomberg noted.
Last week, a Colorado Tesla dealership was vandalized with offensive graffiti and had its windows broken, the third attack in two weeks, according to police.
The company itself has acknowledged that the Trump administration’s trade policy, which could impose tariffs on key U.S. trading partners and manufacturers of industrial inputs, could harm Tesla.
“Over the years, we’ve tried to localize our supply chain in every market, but we are still reliant on parts from across the world for all our businesses,” Tesla Motors’ Chief Financial Officer Vaibhav Taneja said on a recent earnings call, CNBC reports, with the executive noting that “imposition of tariffs” would “have an impact on our business and profitability.”
The company hasn’t introduced a brand new model since late 2023 when it began rolling out the Cybertruck, though it has suggested it could introduce a more affordable option at some point in 2025.
As of Monday morning, Tesla stock was trading around $350, well down from its peak in December of around $480 a share.
