Is the Washington trip the reason for its decline?
Tesla’s shares are witnessing the biggest decline in its 15-year history. It is being reported that the company has been experiencing a continuous decline for 7 consecutive weeks after the company’s CEO, Elon Musk, visited Washington to join the Trump administration. Tesla’s shares have been falling continuously since the US election scheduled for November 05, 2024, and last Friday they fell 10 percent to $270.48, which was the biggest decline this week. The biggest decline so far was seen immediately after the election at $251.44, after which the shares again reached a peak of $480. Shares have been falling continuously since December from $480, due to which the company has suffered a loss of $800 billion. This decline will create a matter of concern for capitalists and business analysts investing in Tesla.
Bank of America has lowered its price targets from $490 to $380 due to a slowdown in EV firm sentiment and no response to Tesla’s low-cost EV model, which is a sign of a drop in EV demand in Europe, the US, and parts of China. Consumers are now interested in cheaper, government subsidized E-vehicles.Major financial institutions such as Goldman Sachs and Baird have also responded in terms of cuts to their price targets. The company is still recovering slowly due to factory closures and manufacturing delays.
Heavy competition but declining demand:
Apart from the fall in shares, Tesla is losing its market position, especially in the face of Chinese rivals like BYD, NIO, and XPeng, which have a much higher market share. Also, Chinese companies are offering advanced features at a comparatively lower price, while Tesla is offering a full self-driving package (FSD) at a higher price. These are benefiting and luring consumers as a comfortable option at an affordable price.The financial advisor confirmed that Musk’s involvement in politics is creating uncertainty in the market.
How risky is it for Tesla to go to the White House?
Musk is a big supporter of reducing the number of employees to save government costs in the Trump administration. Musk is also being trolled on X for other things, such as attacking judges for not liking their views and supporting Kremlin-backed stories.At the same time, anti-Tesla sentiment and anger of protesters are at their peak in Europe and the US.
Way Forward: Can Tesla Grow Again?
Can Tesla Grow More Now? Well, the future is uncertain; it is a game of patience and smart work. It is difficult to say anything right now as the stocks are continuously falling and the competition in the market is also increasing, along with political involvement.The coming weeks may give better answers to these questions.