On March 10, Tesla’s stock saw a significant drop of 14%, marking the company’s largest single-day decline since September 2020. This setback comes after a challenging seven-week losing streak, the longest such stretch since Tesla’s Nasdaq debut in 2010. The stock has fallen more than 50% from its peak of $479.86 per share on December 17, 2023. As a consequence, Tesla has experienced a staggering loss of over $800 billion in market capitalization.
Tesla’s Stock Drops 50% in 3 months, But its Value Remains Debated
Tesla’s market capitalization has fallen 50% since peaking at $1.5 trillion on December 17. This decline has erased much of the stock’s gains, which were fueled in part by CEO Musk’s financial backing of Donald Trump’s successful presidential campaign. The drop reflects significant shifts in the company’s performance.
Political Controversy and Its Impact on Tesla
Tesla is currently facing significant challenges, with multiple factors contributing to its declining sales. While market competition and shifting consumer preferences play a role, industry analysts suggest that CEO Elon Musk’s increasingly controversial political stance is a major factor. His outspoken support for right-wing ideologies and involvement in political debates across the West appear to be alienating many potential buyers.
Musk’s political ambitions, which often align with his business interests, are beginning to overshadow Tesla’s reputation as an innovative electric vehicle (EV) manufacturer. This has led to a growing movement among consumers to disengage from his brand entirely, forming a new kind of activism: boycotting Tesla products.
Declining Sales in Key Markets
Tesla’s Decline in the U.S.
California, Tesla’s largest market in the United States, has experienced a notable decline in sales. The company saw an almost 8% drop in the fourth quarter of 2024 and a 12% decline for the entire year. According to Bloomberg News, consumer trust and likability toward Tesla have dropped to their lowest levels since at least 2023. Analysts estimate that Musk’s political involvement in the 2024 U.S. election negatively affected Tesla’s sales in California.
Musk’s favorability has plummeted, particularly among Democrats and independents. A September 2024 NBC News poll revealed that only 6% of Democrats and 31% of independents held a positive view of Musk. This dramatic shift suggests that his political persona is driving away consumers who once supported Tesla for its environmental mission.
European Sales Plummet
Internationally, Tesla’s struggles are even more pronounced. Axios reports that Tesla sales in 2025 have dropped sharply across several European countries:
- Germany: Sales are down 71% this year.
- Norway: Sales have fallen by 45%.
- France: A 44% decline in Tesla registrations.
- Spain: Another 44% drop in Tesla sales.
The downturn in Germany is particularly significant given that it has the largest electric vehicle market in Europe. Moreover, Musk’s vocal support for the far-right Alternative for Germany party and his controversial comments about the country’s historical guilt may have damaged Tesla’s image among German consumers. His intervention in German politics, including his statements at a virtual event for the far-right party, has drawn widespread criticism and may be contributing to Tesla’s struggles in the region.
Tesla Faces Competition in China
In China, Tesla’s sales plummeted by 49% in February 2025 compared to the previous year. Unlike in the U.S. and Europe, where political controversies play a major role, analysts attribute this decline to rising competition from Chinese electric vehicle manufacturers. Companies like BYD are producing high-quality, low-cost EVs that are capturing market share at Tesla’s expense.
While some consumers are delaying their purchases in anticipation of new Tesla models, Musk’s increasingly polarizing global persona cannot be ignored. According to The New York Times, European activists are linking Tesla ownership with Musk’s politics and urging consumers to choose alternative brands.
Backlash and Vandalism Against Tesla
Tesla was once seen as a symbol of environmental stewardship, boasting a strong liberal and progressive consumer base. However, Musk’s growing association with right-wing extremism is rapidly eroding that image. Many former supporters now view Tesla as a brand tainted by Musk’s political agenda.
This shift in perception has fueled acts of vandalism against Tesla infrastructure, dealerships, and vehicles. Across the U.S. and Europe, disgruntled individuals have defaced Tesla charging stations and showrooms. Some acts of vandalism have included graffiti with messages comparing Musk to a Nazi, particularly following his controversial hand gesture at a rally in January 2025.
Cybertrucks Face Hostility in New Orleans
During a Carnival parade in New Orleans, Tesla’s latest vehicle, the Cybertruck, became a target of public outrage. Four Cybertrucks in the parade were met with a barrage of beads, boos, and taunts from the crowd. According to local news reports, at least one of the Cybertrucks suffered a shattered window before the vehicles were forced to retreat. This incident highlights the increasing public backlash against Tesla and Musk’s personal brand.
The Growing Consumer Boycott
As Tesla’s reputation continues to shift, a growing number of consumers are expressing their discontent by disassociating from the brand. Some Tesla owners who purchased their vehicles before Musk’s political transformation are now using bumper stickers to make their stance clear. One popular sticker reads, “I Bought This Before We Knew Elon Was Crazy.”
These bumper stickers serve multiple purposes. They allow Tesla owners to distance themselves from Musk’s controversial politics while also potentially deterring acts of vandalism against their vehicles.
Market Implications and Tesla’s Future
Despite the controversy surrounding Musk, Tesla remains the dominant player in the U.S. electric vehicle market. However, the company’s long-term success may be at risk if the political backlash continues to intensify.
Shifting Brand Perception
Musk’s political identity is increasingly eclipsing his role as an entrepreneur. Tesla’s success has traditionally been built on innovation, sustainability, and a forward-thinking brand image. Now, it is becoming a polarizing brand, associated more with Musk’s political activism than with cutting-edge technology.
This shift could have profound implications for Tesla’s future. If consumers who prioritize sustainability and progressive values continue to turn away from the brand, Tesla may struggle to maintain its market dominance.
Competition and Market Adjustments
Tesla is also facing growing competition from both legacy automakers and new EV startups. Companies like Ford, General Motors, and Rivian are expanding their electric vehicle offerings, giving consumers more choices outside of Tesla. Additionally, Chinese EV manufacturers are rapidly improving their technology while keeping costs low, making it harder for Tesla to compete in key global markets.
Potential Strategic Shifts
To counteract these challenges, Tesla may need to take several steps:
- Rebranding Efforts: The company could attempt to separate its brand from Musk’s personal political views, though this would be difficult given his deep association with Tesla.
- Product Innovation: Continued advancements in battery technology, autonomous driving, and affordability could help Tesla retain consumer interest despite the political controversies.
- Market Expansion: Tesla might focus on expanding into markets where Musk’s politics have less of an impact on consumer sentiment.
Conclusion
Tesla’s current struggles highlight the risks of a business leader becoming deeply entangled in politics. While competition and market shifts play a role in the company’s declining sales, Musk’s controversial political stance appears to be a major factor driving consumers away from the brand. As Tesla’s reputation continues to evolve, its long-term success may depend on whether it can distance itself from the polarizing persona of its CEO. For now, Tesla remains a dominant force in the EV market, but its future may hinge on whether it can navigate the challenges posed by shifting consumer sentiment, growing competition, and Musk’s increasingly divisive public image.
