Tesla has entered its longest losing streak since its debut on the Nasdaq in 2010, wrapping up a seventh straight week of losses. The electric vehicle giant saw its shares plummet by 14% on Monday, marking the worst day for the company on Wall Street since September 2020. This dramatic downturn reflects broader uncertainties in the U.S. equity markets, with the Nasdaq itself tumbling by 4.4%, its steepest decline since 2022.
The sharp decline in Tesla's stock is tied to several factors, including CEO Elon Musk's involvement with the Trump administration and the uncertainty surrounding President Donald Trump's tariff plans. Since Musk began taking a more prominent role in Washington, D.C., Tesla shares have steadily fallen each week. This period of losses has seen Tesla's stock plummet over 50% from its peak of $479.86 on December 17, effectively wiping out over $800 billion in market capitalization.
Further compounding Tesla's challenges, potential customers are reportedly delaying purchases as they await the new version of the Model Y. Despite being the best-selling battery electric vehicle globally in January, Tesla's sales have not mirrored the overall growth in electric vehicle sales, which rose by 21% year-over-year. Notably, in Europe, Tesla's new vehicle sales plunged by about 50% in January compared to the previous year, as reported by Bank of America analysts.
Brand erosion due to Musk's political rhetoric has also played a role in Tesla's struggles. Activists and former fans have staged protests at Tesla facilities across the United States, with repeated arson attempts and vandalism incidents occurring at locations such as a Tesla store and service center in Loveland, Colorado. These acts of protest reflect a growing distaste for the brand, as highlighted by Ben Kallo, who remarked:
"When people's cars are in jeopardy of being keyed or set on fire out there, even people who support Musk or are indifferent Musk might think twice about buying a Tesla."
Tesla's market woes have been exacerbated by a broader slump in U.S. equities. The uncertainty over Trump's tariff plans has further clouded investor sentiment, intensifying the selloff on Wall Street. Despite these challenges, the global demand for electric vehicles remains robust, with growth primarily driven by European markets. However, Tesla appears to be losing ground in this competitive landscape.