Tesla and SpaceX CEO Elon Musk leaves the stage holding a chainsaw after speaking at the Conservative Political Action Conference (CPAC) conference on February 20. Photo / Getty Images
Tesla and SpaceX CEO Elon Musk leaves the stage holding a chainsaw after speaking at the Conservative Political Action Conference (CPAC) conference on February 20. Photo / Getty Images
Tesla shares plunged more than 15% on Monday (Tuesday NZT), hitting their lowest point since before Election Day as investors registered the impact of falling sales and increasing protests over the high-profile political role that Elon Musk, the company’s CEO, has taken on.
In afternoon trading,the electric-car maker’s shares were down more than 15% for the day, and more than 50% from a mid-December peak. The day’s loss far outstripped the 2.5% drop in the S&P 500.
Growing economic worries: Stock markets around the world fell on Monday, a day after President Trump did not rule out the possibility that his aggressive trade policies aimed at crucial economic partners could cause a recession this year - and refused to rule out recession during a Fox News interview. The Canadian province of Ontario put in place retaliatory tariffs on energy it exports to Michigan, Minnesota and New York, while Trump’s trade war with China intensified as Beijing began imposing retaliatory tariffs on American farm products. The S&P 500 was down more than 2.5% in the afternoon.
The steep rise in Tesla shares that followed Donald Trump’s election as President, and Musk’s appointment as de facto government cost-cutting tzar, has evaporated along with more than $700 billion in stock market value.
Investors had hoped Musk’s financial support for the Trump campaign and his ties to the White House would benefit Tesla, helping to clear regulatory hurdles to the company’s autonomous driving technology.
Instead, Musk’s ubiquitous presence in Washington has proved to be a liability. Investors worry that Musk has not been spending enough time managing Tesla when sales of the company’s cars are plunging.
Tesla has become the target of increasingly intense protests by people enraged over Musk’s leading role in slashing jobs of park rangers and other civil servants while gutting foreign aid and other programmes.
Last week, someone set fire to Tesla charging stations near Boston; shots were fired at a Tesla dealership in Oregon; and protesters were arrested at a nonviolent protest at a Tesla dealership in Lower Manhattan.
The political backlash is blamed at least in part for dismal sales numbers in Europe last month, including a 76% decline in Tesla sales in Germany, the Continent’s largest car market. Musk has endorsed far-right parties in European countries, including in Germany. Analysts also attribute sales declines to a lack of new models and increasing competition.
In January, Volkswagen sold more electric vehicles outside China than Tesla, according to figures published on Monday by SNE Research, a research and consulting firm in South Korea.
Tesla is likely to suffer less than other carmakers from the trade conflicts provoked by Trump, but the company could be a victim of worsening relations with China. Tesla’s largest factory is in Shanghai, where the company makes cars for the Chinese market and for export to Europe and other regions.
