Despite a promising start to the year on the back of strong momentum following the 2024 election, Tesla stock (NASDAQ: TSLA) has experienced significant losses in the first three months of 2025.
Several bearish factors are at play — some general, and some specific to the carmaker.
President Trump’s tariff policies have introduced a significant degree of uncertainty into the financial markets.
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Disrupted supply chains, higher import costs, retaliatory tariffs — all of these possibilities could diminish corporate profits. At the same time, resurgent inflation could lead the Federal Reserve to raise interest rates again — in a move which would further diminish earnings.
Concurrently, the electric vehicle maker saw its first decline in year-over-year (YoY) vehicle deliveries in January. The company’s last earnings call, held on January 29, saw both earnings and revenues come in below analyst expectations. Major Wall Street firms, like JPMorgan and Bank of America, have cut their price targets for Tesla stock — and short-selling activity has increased.
Beyond all of these factors, there is one thing that’s a bit harder to quantify, yet still significant — and that is the negative effect of Chief Executive Officer (CEO) Elon Musk’s political involvement. An increasingly controversial figure, Musk’s actions and statements over the past couple of months have led to the formation of the Tesla Takedown movement, which is boycotting the company’s products — let’s take a closer look at how the company’s stock has fared since it began.
Tesla stock shed almost 40% of its value since the boycott began
Musk was the largest donor who backed Donald Trump’s campaign for the presidency. At Trump’s inauguration, the billionaire performed what appeared to be a Nazi salute. Despite the incident being dismissed as harmless by conservative media, the gesture sparked widespread outrage.
In addition, a key part of Trump’s platform was the establishment of the Department of Government Efficiency (DOGE) — a body that would, purportedly, tackle unnecessary waste in government spending, with Elon Musk at its helm. A part of the public raised concerns regarding the fact that an unelected, foreign-born billionaire would be given free reign to oversee such efforts.
The Tesla Takedown boycott started on February 3, when protesters gathered outside of the United States Office of Personnel Management. At the time, Tesla stock was trading at a price of $383.68.
By press time on March 13, the price of TSLA shares had receded down to $237.80, equating to a 38.02% drop since the boycott started
While it is impossible to precisely quantify the effects that negative sentiment and the boycott have had on the automaker’s stock price, it’s hard to argue that they haven’t contributed to these recent losses. Moreover, as President Trump and Musk have recently dubbed the movement illegitimate (and illegal), tensions are unlikely to subside soon.
On a year-to-date (YTD) basis, Tesla stock has seen a 41.12% decrease in value. Despite recent price target cuts, the average 12-month price forecast for TSLA shares, which stands at $347.59, implies a significant upside.
Featured image via Shutterstock
