Tesla's stock has experienced a significant downturn, plummeting 25% at the start of the year, largely due to President Trump's announcement of extensive tariffs on goods from Canada, Mexico, and China earlier this month. This economic shift has contributed to a weakening demand for Tesla vehicles, with registrations across Europe declining in January and February. In California, once Tesla's strongest market domestically, sales fell by 11.6% in the fourth quarter of 2024, as reported by the California New Car Dealers Association.
Elon Musk and his Washington team have gained unprecedented access to government computer systems and taxpayer data. This access has enabled Musk to orchestrate mass firings within agencies that oversee his companies, including Tesla. Despite these actions, Tesla's market performance continues to suffer. The company attributes part of its domestic sales decline to reduced average selling prices across its aging lineup of Model 3, Model Y, Model S, and Model X vehicles.
Internationally, Tesla faces challenges in China after its anticipated upgrade to the partially automated driving system left owners unimpressed. This comes as local competitors like Xiaomi and BYD offer their advanced driving systems at no cost or significantly lower prices, intensifying competition for Tesla in one of the world's largest automotive markets.
Financially, Elon Musk has seen his net worth decrease by over $100 billion during this period, although he remains the world's richest individual with a fortune close to $380 billion. His financial backing of Trump's presidential campaign, amounting to $290 million for Republican candidates and causes in 2024, underscores his political involvement.
Tesla shares are currently trading about 20% above their pre-Trump victory levels. However, the company's stock remains under pressure compared to the broader Nasdaq index, which is down only 1.5%. The combination of international competition, domestic market challenges, and political developments continues to impact Tesla's fortunes as it navigates the complexities of the global automotive landscape.