The Uncomfortable Truth Behind Tesla’s Falling Stock Prices

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Elon Musk has become as much the face of Donald Trump’s presidency as Trump himself. Musk speaks at Cabinet meetings, sits down with Sean Hannity as Trump’s equal, and takes reporters’ questions from the Oval Office. He walks around like he owns the place, not wearing a suit—now a big deal, apparently!—and letting his son use him as a human jungle gym as he stands a few steps away from where Trump sits.

Musk has garnered lots of attention for this power move. Some is positive. Most is not. Tesla, his biggest company, has become the subject of widespread boycotting calls by his and Trump’s opponents. There are frequent protests outside of Tesla showrooms. Barely a day passes without the viral egging of a Cybertruck. Tesla owners are getting international press attention for flipping their cars at a loss just to get rid of them. “I’m selling the Nazi mobile,” one dissatisfied driver says. The social internet might create an outsized impression of how common those acts of resistance are, but they still seem at least reflective of a shift. Public approval of Musk’s government obliteration really is low, and disapproval of Tesla itself is higher than ever.

Meanwhile, Tesla’s stock price is declining rapidly. Musk’s largest company lost 24 percent of its value in February. It was the stock’s second worst month ever, and then it fell another 3 percent on Monday, the first trading day of March. What a coincidence it would be if none of that had anything to do with the ever-growing, controversial public persona of its very famous chief executive. Big left-of-center social media accounts are celebrating their work: “Congrats, everyone—the Elon boycott is working!” a Bluesky post from a mysterious account with 800,000 followers reads.

How much of that is wishful thinking by liberals desperate for a win, and how much is the anti-Musk resistance already notching wins? We know from recent history that Musk’s intense focus on non-Tesla projects can be a drag on Tesla’s stock. We also know that the stock can go back up rapidly without Musk dialing back his obnoxiousness or giving up his other projects. We do not know how much of the electric car company’s recent tanking owes to opposition to Musk personally and how much stems from Tesla’s wider business challenges, or how much those two things have to do with each other.

In other words: Claiming that Tesla boycotts have hurt Musk any worse than a bee sting is speculative cope—but it doesn’t have to stay that way. The job, as Kobe Bryant once said, is not finished.

People don’t fill out a questionnaire every time they sell Tesla stock, so we don’t know exactly what causes its price to go down. The evidence is strong, though, that Tesla shares trade down when the spotlight shines extra brightly on Musk paying attention to other things.

Tesla’s stock began struggling more or less concurrently with Musk launching his bid for Twitter in the spring of 2022. The stock had a very bad year even compared to other American stocks, and Musk’s selling of Tesla shares (and an aborted plan to use Tesla shares as collateral for his bank loans) aggravated the situation. Musk is always very famous and always known to have lots of balls in the air, but he’s not usually as famous as he is right now. To the extent that Americans are aware of what his “government efficiency” initiative is up to, the polling says they are skeptical of it and of Musk specifically.

A team of Wedbush Securities analysts, who are bullish on Tesla overall, put it this way in a Feb. 24 note to clients: “The worry of the Street is that Musk dedicating so much time (even more than we expected) to DOGE takes away from his time at Tesla in such a crucial moment and year for the company.” The investment firm thinks Tesla will manage through its Musk-related branding problems and its stock will rebound, but it calls a spade a spade. Musk’s Department of Government Efficiency and Trump alliance “clearly could alienate some consumers to move away from the Tesla brand.”

But there are problems with the idea that anti-Musk sentiment is driving Tesla into the ground. The stock had a miserable February but remains up nearly 40 percent over the past six months. Trump’s victory was a win for Tesla’s stock. The day after the election, investment research firm CFRA found that Tesla and Musk “are perhaps the biggest winners from the election result, and we believe Trump’s victory will help expedite regulatory approval of the company’s autonomous driving technology.”

Any gains the boycotters have made so far have not outweighed the benefit to Tesla’s stock from having its CEO more or less running the American government. After all, this self-serving domination of our politics is the very genesis of the protests.

There is also the distinct possibility that Tesla’s stock just goes up anyway even if Musk never changes his behavior and liberals never bought a Tesla or rode in one when ordering an Uber again. Musk’s obsession with Twitter dragged the stock for a while, but then the car company’s stock shot up to market-beating heights in 2023 and 2024. It’s not as if Musk quieted down or became a less controversial public figure the past two years. Quite the opposite. Tesla’s biggest problems at the end of 2022 were not just about Musk’s reputation, but headwinds in the electric car market and broader economy. The company addressed those worries to Wall Street’s satisfaction, at least for a time.

There’s a fair case that this time will be different, though. Musk is now very popular with Republicans, which would be better for Tesla if Republicans bought electric vehicles. But they don’t, perhaps because conservative media and politicians have spent years denigrating EVs whenever possible. Meanwhile, Democrats do buy electric vehicles but, I think it’s safe to say, will increasingly look for EV vendors who are not Elon Musk. Again, that would be less of a problem for Tesla if Republican adoration of Musk converted to more GOP voter enthusiasm for electric cars.

“Could Elon Musk move that troublesome GOP needle?” asked Republican political operative Mike Murphy in a February report accompanying a new poll on the issue. “With his hostility to EV consumer subsidies, and the unwelcome market competition for Tesla that it helps create, the early answer is probably not. Elon seems focused on other things now and helping break down GOP hostility to EVs appears to be low on his priority list.”

Tesla has other challenges elsewhere. Sales have been bad lately in Europe, where Musk has also done a bunch of political meddling. Increased Chinese competition for EV market share in that country was likely the biggest problem for Tesla’s stock two years ago, and the company is still losing ground there. The company underperformed in new car deliveries in the fourth quarter of last year, before DOGE existed or Musk cosplayed as Benito Mussolini on a podium on Inauguration Day. Federal regulators launched their latest probe into Tesla self-driving technology in the last few days of the Biden administration. Does the federal government still regulate Tesla in any serious way? Maybe not, but other countries reserve their rights to do so, and every news story with the words “investigation” and “self-driving” is bad press.

This blend of events leaves the anti-Musk, anti-Tesla forces in a place of opportunity. While it’s a stretch to say that protests and boycott calls were responsible for all of the stock’s drop in February, or even most of it, it’s implausible that they’ve had no effect on investor confidence in the company. Musk is the face of Tesla, and he has polarized himself against the people who are most likely to buy his company’s primary product.

That may not hurt Musk in the long run. He could find more customers elsewhere, or he could persuade huge swaths of Republicans that they are saving America by purchasing his electric cars. Moreover, even if huge numbers of people dislike Musk, many of them may not shun Tesla as a result. The link between disdain and action may not form, in the same way that people who don’t like slaughterhouses still eat steak. A recent observation by New York City–based climate reporter Kendra Pierre-Louis on Bluesky has stuck with me: “I went to the tesla protest for a thing I’m working on and I talked to several onlookers – not protesters – and asked them what they knew about Elon and Doge and I’m telling you people don’t know.”

Creating that link in a collective mass of minds requires relentless news coverage and reaching millions of people who do not consume a lot of political news. Right now, people are showing up at Tesla locations and shaming Tesla car owners in an effort to build that attention. It might not be enough, but it’s a more effective and satisfying plan to counter Musk than anything that has so far emerged from most Democrats with power.