Tesla’s stock has suffered a 30% decline since the beginning of 2025, as investors grow increasingly wary of the company’s direction. Once buoyed by Elon Musk’s close ties to U.S. President Donald Trump, Tesla’s valuation has reversed sharply, raising questions about the company’s long-term prospects, as reported by Autokult.
From Record Highs to Rapid Decline
In late 2024, Tesla’s stock surged following Trump’s election victory and his appointment of Musk to lead the newly established Department of Government Efficiency (DOGE).
By December 17, 2024, shares hit an all-time high of $479.86, a sharp contrast to previous valuations. However, by January 20, 2025, during Trump’s inauguration, Musk’s controversial public gestures triggered a shift in sentiment, leading to a steep drop in Tesla’s market value.
By March 2025, Tesla shares had fallen to $284, erasing months of gains and returning to pre-election levels.
Prominent investor Ross Gerber, who previously had strong confidence in the company, has since reduced his stake in Tesla by 31%, predicting that the worst declines are still ahead.
Market Overvaluation and Declining Sales
Analysts have long warned of Tesla’s inflated market valuation. Despite its $852 billion market capitalization as of early March, the company generates just 20% of Toyota’s profits while being 3.5 times larger in valuation.
A JPMorgan report has revised Tesla’s fair stock value to $135 per share, significantly lower than its current trading price.
At the same time, sales figures have been slipping. In 2024, Tesla sold 1.79 million vehicles, a 1.1% drop from 2023—its first annual sales decline in nearly a decade.
Early 2025 figures show even steeper drops, with European registrations down 46%, Chinese sales declining 11.5%, and Tesla’s stronghold in California seeing an 11.6% decrease.
Investor Frustration and Musk’s Priorities
Tesla’s struggles are compounded by Musk’s apparent lack of focus on the company. Now balancing responsibilities across SpaceX, X (formerly Twitter), xAI, and the U.S. government, Musk’s absence has sparked discontent among shareholders.
Some have publicly questioned his commitment, with media figures like David Portnoy asking, “How much does Tesla’s stock need to fall before Elon goes back to work?”
As Tesla faces growing competition from Chinese automakers and an aging vehicle lineup, investors are left wondering if the company can regain its former momentum—or if further declines are inevitable.
