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CNN
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Elon Musk’s Challenges with Tesla Stock
Elon Musk’s recent political endeavors haven’t boosted Tesla’s stock as investors had hoped.
Tesla’s stock has plummeted over 40% since January, wiping out the significant gains made post-Election Day. Musk has lost a staggering $121 billion in personal wealth linked to his Tesla shares over the past three months.
Underlying Issues for Tesla
So, what went wrong? Why hasn’t Musk’s rise in power helped salvage his beloved Tesla?
There are two key reasons:
- Tesla’s sales are declining globally, and…
- Its CEO is seemingly absent in addressing the issues.
Sales Struggles and Market Dynamics
While Musk engages politically, Tesla grapples with significant sales challenges. Last year marked the company’s first-ever global sales drop, and forecasts for this year suggest little improvement.
Analysts from major firms have reduced their delivery projections due to increasing competition, particularly from domestic manufacturers in China where Tesla’s shipments fell 49% year-over-year.
In Europe, the situation is similarly grim; sales in Germany alone have plummeted by 76% after public backlash against Musk’s political affiliations. Tesla’s recent stock decline follows bad news from its Chinese rival, BYD, which launched a superior charging system, while Tesla attempted to revive investor interest with a month-long free trial of its software.
The Impact of Musk’s Leadership
Despite being a market leader in electric vehicles, Tesla is increasingly feeling the heat of competition. The decline in value for used Teslas is more pronounced than for the general vehicle market, with some models experiencing drops as much as 58% in resale value.
Furthermore, an activist movement advocating against Tesla, driven by discontent with Musk, appears to be gaining traction. Many current owners express embarrassment about their association with the brand, indicating a deeper issue with Musk’s current image and political stance.
Wall Street investors have tolerated Musk’s eccentric behavior due to Tesla’s dominance, but this patience may be waning as the market landscape shifts and concerns grow about Musk’s ability to effectively lead and resolve ongoing challenges for the company.
