Tesla under pressure: plummeting shares, dispute with Trump and growing competition
The American car company Tesla used to be a symbol of technological progress, innovation and stock market success. But since the beginning of this year, the situation is turning around – the market is starting to demand concrete results to justify the former high market value, driven mainly by investor optimism. As a result, the company’s shares fell by 14% in a single day, pushing its market capitalisation below the one trillion dollar mark. The question remains whether investors have reason to worry.
The political background to the slump
At the end of May, Tesla lost the number one position in the number of electric cars sold to the Chinese company BYD, which weakened its position. However, the current $126 billion drop – the biggest in the company’s history – has another cause: intervention by the US government.
President Donald Trump has harshly criticised Elon Musk and threatened to withdraw government contracts for his companies – Tesla, SpaceX and the new company xAI. The reason is Musk’s opposition to the president’s budget plan, which he says does not sufficiently support green technologies. In particular, he is bothered by the lack of subsidies for electric cars and solar energy and the introduction of a $250 annual fee for electric car owners, which he described as a ‘disgusting abomination’.
Tensions between Trump and Musk
The conflict has escalated from the political level to personal outbursts on social media. Trump accused Musk of being ‘crazy’ after he took away the mandatory mandate for electric cars. Musk countered on the X network by claiming that without his support, Trump would have lost the election and the Republicans would have lost their majority in Congress.
Declining sales and strong competition
Investors reacted immediately, but the drop in Tesla’s stock is part of a broader negative trend. The company is facing declining sales in European markets and its anticipated autonomous taxi service in Austin, Texas, is still in the works. Meanwhile, Google’s rival Waymo is already successfully operating self-driving cars and expanding services.
A signal to buy or a warning?
Back in May, Tesla’s stock was up more than 22% despite weak results. This shows how strongly the share price rise was based on expectations rather than real numbers. But now the situation reveals that without tangible results in the field of autonomous driving and without a calming of relations with Washington, Tesla may lose not only the confidence of investors but also the support of the US state – until now one of its key pillars.
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