Elon Musk faces criticism over Tesla’s decline as investors question his focus amid US government overhaul
Tesla faced an intensified sell-off on Wall Street Monday, as shares dropped 15 percent, marking their worst trading day in the US since September 2020, according to CNBC.
The electric vehicle maker’s steep drop extends its losing streak to seven consecutive weeks, the longest since Tesla debuted on the Nasdaq in 2010.
Since peaking at US$479.86 per share on December 17, Tesla’s stock has fallen more than 50 percent, eliminating roughly US$800bn in market capitalization.
On Monday alone, Tesla led a broader downturn in US equities, with the Nasdaq dropping nearly 4 percent, its largest daily decline since 2022.
Tesla's sharp stock decline is directly linked to CEO Elon Musk’s expanded political duties in Washington, DC, where he leads the Department of Government Efficiency (DOGE) under the Trump administration, Business Insider reports.
Since Musk joined the Trump administration, Tesla’s stock has declined each week, reflecting increasing investor anxiety about his dual responsibilities, CNBC notes.
Garrett Nelson, a senior equity analyst at CFRA Research, told Business Insider investors have “legitimate concerns” that Musk is now “spread too thin,” dedicating more time to DOGE than Tesla.
A poll on retail trading platform StockTwits highlighted this frustration, with 60 percent of respondents believing Musk’s White House focus negatively impacts Tesla, according to Business Insider.
Investor Ross Gerber offered a more severe critique, suggesting Musk step away from daily Tesla operations entirely.
Gerber argues Musk’s political involvement has harmed Tesla’s brand, recommending appointing a politically neutral CEO to rebuild consumer confidence.
However, Gerber acknowledges Musk's presence significantly influences Tesla’s stock, estimating around US$150 to US$200 per share relies on Musk’s continued involvement.
Wedbush analyst Dan Ives disagrees with suggestions that Musk step down, expecting Musk to remain Tesla’s CEO for another five to seven years at minimum.
Ives told Business Insider that Tesla’s future valuation will depend less on current EV sales and more on its developments in autonomous vehicles and robotics.
On Monday evening, Musk addressed his divided responsibilities directly, telling Fox Business he was managing his businesses “with great difficulty.”
Musk also said he expects to remain part of the Trump administration for at least another year, possibly expanding DOGE’s current staff from over 100 individuals to around 200.
Musk claimed DOGE is currently saving over US$4bn per day, asserting total savings could reach US$1tn, though CNBC notes DOGE has retracted some savings claims due to accuracy challenges.
Tesla’s challenges also include weakening brand perception linked to Musk’s political statements and controversial online behaviour. Recent incidents of vandalism and arson targeting Tesla facilities have occurred nationwide.
According to CNBC, Loveland, Colorado police reported multiple attacks on a Tesla store and service centre, most recently on March 7.
Ben Kallo, an analyst at Baird, explained to CNBC’s ‘Squawk on the Street’ that such incidents could discourage buyers, even Musk supporters, from purchasing Teslas.
Further complicating matters, Tesla’s new vehicle sales dropped about 50 percent in Europe in January compared to the previous year, partly due to diminished brand appeal and buyers awaiting an updated Model Y, according to Bank of America analysts.
Despite the decline, the Tesla Model Y was the best-selling battery-electric vehicle globally in January.
China's Geely Geome overtook Tesla’s Model 3 sedan sales during the same period. Overall global electric and hybrid vehicle sales increased by 21 percent year-over-year, driven by demand in Europe.
Adding to Musk’s challenges, CNBC reports his social network X experienced multiple outages Monday, which Musk attributed without evidence to “a massive cyberattack” from internet addresses in Ukraine.
SpaceX, another Musk-led company, is investigating two recent explosions during Starship rocket tests.
On a political note, Musk drew further controversy Monday by calling Democratic Arizona Senator Mark Kelly a “traitor” on X after Kelly visited Ukraine.
Traitor?
— Senator Mark Kelly (@SenMarkKelly) March 10, 2025
Elon, if you don’t understand that defending freedom is a basic tenet of what makes America great and keeps us safe, maybe you should leave it to those of us who do. pic.twitter.com/9dgmQfg7HZ
Kelly responded by suggesting Musk leave national security matters to qualified individuals, CNBC reports.
This exchange took place amid pressure from the Trump administration for Ukraine to accept a ceasefire with Russia, involving territorial concessions and US stakes in Ukrainian minerals.
