Tesla (NASDAQ: TSLA) entered 2025 on a high note after reaching an all-time high (ATH) of $479.86 on December 17, 2024. The rally and the bullish expectations were driven by Elon Musk’s promises and his close ties with then-President-elect Donald Trump, leading investors to anticipate further gains.
However, just three months into 2025, Tesla’s stock has suffered a dramatic reversal. The electric vehicle (EV) giant has plunged over 40% year-to-date, trading at $222.42 as of March 11.
The downturn has been driven by weaker-than-expected Q4 earnings, sluggish vehicle deliveries, and intensifying competition from both legacy automakers and emerging EV startups. Elon Musk’s political stance has also sparked controversy, further dampening investor confidence.
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Market shifts and Tesla’s struggles
Tesla’s struggles reflect broader market trends in 2025. Despite initial optimism around Trump’s pro-business policies, U.S. stocks have underperformed relative to their Chinese counterparts.
The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite are all in the red, while Bitcoin (BTC) has tumbled from $102,204 at the start of Trump’s term to $81,266 at press time. Meanwhile, China’s stock market has seen a surge, with the MSCI China Index soaring 17% year-to-date.
Trump’s policy decisions have further fueled volatility. On March 4, his administration announced new tariffs on China, Canada, and Mexico, triggering a broad sell-off in risk assets. While the long-term impact remains uncertain, the immediate fallout has been rough, adding to economic uncertainty.
Tesla’s declining sales and Musk’s controversial politics
Tesla’s troubles have been particularly pronounced in Europe, where sales have reportedly dropped as much as 70% in some countries. The decline has been attributed to a mix of factors, including Musk’s controversial political views.
Musk’s support for Germany’s far-right Alternative for Germany (AfD) party has been met with significant backlash, especially after his remarks that Germany has ‘too much of a focus on past guilt.’ These comments sparked boycott calls in Poland and other European nations.
Beyond Europe, Tesla is also facing significant challenges in China, the world’s largest EV market. While Musk’s political stance has had little influence on Tesla’s standing in China, the company is under mounting pressure from domestic competitors.
$1,000 worth of TSLA shares would be worth this much
The impact on Tesla’s stock has been severe. Following Trump’s inauguration for his second term on January 20, TSLA closed its first trading session at $424. However, by March 11, the stock had plummeted to $222.15, a staggering 47.6% decline.
For investors, the losses have been significant. A $1,000 investment in Tesla on January 20 would now be worth just $524, wiping out nearly half of its value in less than two months.
Even Musk has taken a massive financial hit. Following his latest reported TSLA equity transaction on December 30, the billionaire owned 410.8 million shares.
At Tesla’s current price, his stake is now worth $105 billion, down from $175 billion in January. This marks a staggering $70 billion decline in Musk’s Tesla-related wealth.
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