Tesla Stock Hits New Low Amid Market Recovery and Musk’s Political Ties

NEW YORK, March 17, 2025—Tesla Inc. continues to struggle in the stock market as shares plummeted nearly 5% to approximately $238 on Monday, even as the broader market showed signs of recovery. The decline is part of an alarming trend, with the electric vehicle maker experiencing a nearly 50% depreciation in stock value since the start of the year.

Despite the S&P 500 rising 0.7% on Monday, showcasing positive momentum after a 2.1% bounce last Friday, Tesla was the worst-performing stock among major companies valued at over $100 billion, according to FactSet data. The unresolved tensions surrounding CEO Elon Musk’s increasing involvement in U.S. politics seem to have compounded the company’s challenges.

Mizuho analysts, led by Vijay Rakesh, issued a note on Sunday, lowering their price target for Tesla from $515 to $430 while also cutting their vehicle delivery forecast from 2.3 million to 1.8 million for 2025. Rakesh attributed these adjustments to declining brand perception and fierce competition from domestic manufacturers in China, as well as rising geopolitical tensions.

Sales data remains troubling. In the U.S., Tesla reported a 2% drop in sales year-over-year, despite the overall electric vehicle market growing by 16%. Meanwhile, the company’s sales in China fell a staggering 49% amidst an 85% surge in local EV sales. In Germany, sales sank 76%, even as the electric vehicle market expanded by 31%, illustrating the mounting difficulties Tesla faces globally.

The implications of the stock’s decline extend beyond market valuation. Tesla’s stock has dropped 41% year-to-date, raising concerns over employee compensation programs where workers receive stock options. Musk’s involvement in politically charged matters has prompted protests at Tesla showrooms, further impacting consumer sentiment and brand loyalty.

JPMorgan analysts previously highlighted the detrimental impact of Musk’s political engagement on Tesla’s public perception. An accompanying poll revealed that only 35% of respondents hold a positive opinion of Musk, while 53% view him negatively. This shift in sentiment poses significant risks to Tesla’s sales and overall performance.

Musk’s political influence intensified last week when he appealed to the U.S. Trade Representative, urging a reconsideration of the tariff structure affecting Tesla’s operations. His ties with controversial political figures, particularly Trump’s hawkish trade policies, may complicate Tesla’s growth strategy as they navigate complex trade dynamics.

In an effort to innovate, Tesla plans to roll out free trials for its Full-Self Driving software to all owners with the latest hardware from March 17 to April 16, 2025. However, regulatory barriers in China regarding data transfer further complicate Tesla’s ability to collect crucial training data and improve its autonomous vehicle technology.

Despite these challenges, the company remains optimistic about future launches, including the anticipated Cybercab set to debut this year, which could potentially reinvigorate its market presence. Analysts remain divided on Tesla’s long-term outlook, with some arguing the company’s fundamental strengths should not be overlooked.

As investor sentiment remains shaky, questions linger regarding Tesla’s ability to pivot and adapt. The growing pessimism surrounding Musk’s leadership and the broader implications of his political affiliations underscores the urgency for Tesla to regain consumer trust and stabilize its market position moving forward.