For Tesla, 2025 is a band of failures and disappointments. In the first quarter of this year, the shares of the manufacturer of electric vehicles fell by 36 percent And it was the third deepest decline in the company’s stock market history. Tesla’s discount in the first quarter erased over $ 460 billion in the company’s market capitalization.
The last time Tesla had a worse period at the end of 2022, when her shares got cheaper by 54 percent. Then Elona Muska sold Tesla shares worth over $ 22 billion to finance the takeover of Twitter (currently X) for $ 44 billion. CNBC reminds that on Friday Musk announced that his startup dealing with the artificial intelligence XAI took over the Social Media platform X in a transaction valued at $ 33 billion.
Musk’s political activity
Almost the entire first quarter of this year coincides with the time of the second term of Trump. In Trump’s administration, Musk plays an important role. Multimiliarder manages Department of government efficiency, i.e. Doge, which conducts activities aimed at cutting expenses government and regulation and released tens of thousands of federal employees.
According to the data posted on the dog website, it shows that Until March 24, the program recorded $ 140 billion in reducing federal expenditure – notes CNBC, adding that this amount is less than a third of the loss of Tesla’s valuation in the first quarter.
As noted CNBC, earlier the Doge website contained numerous errors, and Many Musk’s allegations regarding waste, fraud and abuse in the federal budget turned out to be misleading or false.
Musk is a burden for Tesla
For Tesla, the role of Musk in the White House is one of the aggravating factors. His actions contributed to the wave of protests, boycott and brutal attacks on Tesla shops and vehicles around the world. Customs policy of President Donald Trump does not help, because customs duties concern key providers of Tesla, in particular Mexico and China.
In addition, Tesla must measure with a sharp decrease in sales of new vehicles and pressure related to the need to keep the promises of Musk regarding robotaxes, while rivals strengthen their advantage on the market.
History replay, will it be similar now?
The decrease in share prices in the first quarter was painful for shareholdershowever, this was not the only such case in the company’s history. In the near past, shareholders experienced similar variability. A year ago, In the first quarter of 2024, the shares got cheaper by 29 percent. Then the reason for such a significant discount was the decline in sales and increased competition in the electric car segment. However, later in the year, the company’s shares grew, Ending last year with an increase of 63 percent. Will the story repeat itself now? Musk believes in this and encourages investment in a company, claiming that declines are a great opportunity to buy shares.
Source: CNBC
