Gary Zhou 
Key Takeaways
- Tesla shares experienced a significant 28% drop in February, marking their worst month since December 2022.
- February was also Elon Musk’s first full month serving in Donald Trump’s White House as part of his second administration.
- The decline in Tesla stock is attributed to softening sales, new tariffs affecting Tesla’s suppliers from Canada and Mexico, and increasing anti-Musk sentiment.
- Musk’s controversial role in the Department of Government Efficiency (DOGE) involves reducing federal spending and regulations, stirring public and market reaction.
- Musk’s involvement in international politics, especially his controversial support of Germany’s far-right AfD, has sparked widespread criticism and accusations of election interference.
- Anti-Tesla and anti-Musk sentiment has intensified, with incidents like suspected arson attacks on Tesla cars, a viral ad naming Tesla “Swasticar,” and calls for boycotts.
- Although Musk promotes Tesla’s future in self-driving tech and robotics, Tesla lags behind rivals in autonomous vehicle offerings.
- Chinese and other international competitors have begun offering advanced driving systems at a competitive price, posing challenges to Tesla’s market position.
Elon Musk is no stranger to controversy or the headlines. Recently, Tesla has faced a particularly challenging period as its stock experienced a dramatic 28% plunge in February 2025—the company’s worst month since December 2022. This decline incidentally occurred during Musk’s first full month serving in the White House under Donald Trump’s second administration. As Musk transitions into a governmental role, let’s explore what this means for Tesla, its stockholders, and the broader auto industry.
The Interplay between Politics and Business
Elon Musk’s White House Role
In February 2025, alongside juggling his responsibilities as the CEO of Tesla and SpaceX, Musk has taken on a new role in President Donald Trump’s administration. Appointed to lead the Department of Government Efficiency (DOGE), Musk’s mandate involves reducing federal spending, slashing regulations, and consolidating agencies. While these aggressive measures aim to streamline government operations, they have triggered public and market reactions that may have indirectly affected Tesla’s market perception and stock value.
Tesla’s Softening Sales and New Tariffs
Tesla’s recent stock decline is not solely based on Musk’s political pursuits. Several business-related factors have significantly impacted investor sentiment:
- Sales Performance: Tesla reported an 8% drop in automotive revenue and a 23% decrease in operating income in its latest earnings report, attributed primarily to reduced average selling prices across its product line.
- Tariff Pressures: New tariffs implemented by the Trump administration, affecting goods from Canada and Mexico, have disrupted Tesla’s supply chain, increasing production costs and complicating sales forecasts.
The Global Political Arena and its Ripple Effects
Political Controversies
Elon Musk’s newfound political clout has not gone unnoticed and has extended beyond the borders of the United States:
- Promoting Germany’s far-right party, Alternative für Deutschland (AfD), has sparked accusations of election interference, resulting in mounting criticism.
- Musk’s comments on international affairs, particularly regarding Ukraine and Russia, have drawn backlash, stirring anti-Tesla sentiment.
Rising Anti-Musk and Anti-Tesla Sentiment
The adverse public perception surrounding Musk’s dual roles has escalated tension:
- A recent ad campaign labelled the Tesla vehicle line as “Swasticar,” portraying Musk in negative connotations reminiscent of controversial gestures.
- Incidents of vandalism against Tesla vehicles and vocal boycotts signal brewing resentment from the public and stakeholders, reducing investor confidence.
Tesla’s Position in the Technological Race
Self-Driving Tech and Robotics
Even as Musk champions the potential of self-driving cars and robotics, Tesla is currently trailing:
- Competitive Pressure: Rivals in the U.S. and China have pushed ahead in autonomous vehicle development, offering advanced systems at competitive pricing.
- Technological Gaps: While Tesla promises advancements in its self-driving “CyberCab,” it lags behind competitors such as Waymo, which has made significant strides in commercial deployment.
Insights and Advice: Riding Out the Storm
- Assessing Stock Viability: Investors should critically assess Tesla’s stock given its market turbulence and Musk’s evolving roles. Consider staying informed on any shifts in U.S. policy or changes in leadership strategy within Tesla.
- Monitoring Global Markets: Understanding global political landscapes and economic policies can provide insight into potential risks and opportunities associated with Tesla’s international operations.
- Technological Developments: Those interested in the autonomous vehicle market should note the diverse range of options available, recognizing the competition and innovations occurring outside Tesla’s sphere.
While the challenges facing Tesla under Musk’s multifaceted leadership are tangled, they offer valuable lessons in how global politics, corporate strategies, and technological advancements can intersect in today’s dynamic world.
