Tesla Shares Plunge Amid Turmoil in Trump Administration and Trade Policies

Lisbon, Portugal — A sell-off on Wall Street intensified Monday, with shares of electric vehicle maker Tesla plunging 15%, marking their worst day on the market since September 2020. The company has faced significant turbulence, including a seventh consecutive week of losses following CEO Elon Musk‘s recent involvement in the Trump administration.

Tesla’s stock has now fallen every week since Musk took on a role in the Trump White House, leading to a decline of more than 50%, or over $800 billion in market capitalization, since it peaked at $479.86 on December 17. This truck down has been particularly concerning as it marks the stock’s seventh worst day on record, contributing to a nearly 4% drop in the Nasdaq Composite.

During an interview on Fox Business, Musk addressed the dual challenges of managing Tesla while also fulfilling his governmental duties. He stated, “It will be fine long-term,” in reference to the steep decline in Tesla’s stock price.

Uncertainties surrounding proposed trade tariffs have significantly impacted Tesla. Canada and Mexico, important markets for automotive suppliers, could see production hikes and prices rise under increased tariffs, raising fears of a trade war. The electric vehicle market is further challenged by Musk’s controversial political rhetoric and his efforts to streamline the federal government, particularly his leadership role in the newly established Department of Government Efficiency.

Activist protests against Musk have surged, with demonstrators targeting Tesla facilities across the U.S. Vandalism and arson attempts have been reported, including incidents at a Tesla service center in Loveland, Colorado. Analyst Ben Kallo from Baird expressed concerns about consumer sentiment, stating, “When people’s cars are in jeopardy of being keyed or set on fire, even supporters might think twice about buying a Tesla.”

Bank of America reported that Tesla’s new vehicle sales in Europe plummeted by approximately 50% in January compared to the same month last year, partially due to growing consumer dissatisfaction with the brand. Despite this, Tesla’s Model Y remains the best-selling battery electric vehicle globally.

At the same time, the overall electric vehicle market saw a 21% growth in global sales in January, suggesting that Tesla’s decline may be part of a broader market reaction rather than isolated troubles. The decline is further compounded as consumers await a new version of the Model Y, signifying a potential wait-and-see approach from prospective buyers.

On Monday, technology stocks, particularly in fintech, faced their steepest declines since 2022 as Wall Street reacted to rising uncertainties. The Dow Jones Industrial Average plummeted 890 points, or 2.1%, amid fears that tariffs and government policies will strain the economy.

Trump has publicly commented on the situation, hinting at a transitional period for the economy and noting efforts to restore manufacturing jobs in the U.S. He remarked, “I hate to predict things like that. There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing.”

As the Federal Reserve Bank of Atlanta indicates potential economic shrinking, analysts predict recession risks are rising, with Goldman Sachs lowering its growth estimate for the U.S. economy in 2025. David Mericle, an economist at Goldman Sachs, acknowledged a one-in-five chance of recession within the year, emphasizing that tariffs could potentially exacerbate economic troubles.

The uncertainty in the market has led investors to flock to safer investments, evidenced by a notable increase in U.S. Treasury bond purchases, while dealing with significant drops in cryptocurrencies such as Bitcoin, which has fallen below $80,000 after previously exceeding $106,000 in December. Overall, the S&P 500 index dropped significantly, reflecting broader market anxiety tied to trade negotiations and economic policy uncertainties.