Tesla’s stock plummets in its largest decline in five years, erasing $800 billion | Carscoops

      While Tesla's valuation has significantly decreased, it still surpasses the combined worth of most other major automotive manufacturers.

      Tesla's market capitalization has declined by around $800 billion since its peak in December.

      Analysts at UBS forecast that Tesla will sell 367,000 vehicles in the first quarter, reflecting a 6% decrease from the previous year.

      Musk’s ongoing involvement in politics appears to be adversely impacting Tesla’s valuation.

      In the aftermath of Donald Trump’s election victory, Tesla’s stock soared, reaching an all-time high of $479 per share, which propelled Elon Musk’s net worth upward by over $150 billion. However, the situation has shifted dramatically since then. Following Trump’s inauguration, Tesla's stock has experienced a downward trend, plunging more than 15% on Monday alone to $222, a level not seen since last October.

      This latest decline represents Tesla’s most significant single-day loss since September 2020, and it stands over 53% below that peak of $479 in mid-December. As of now, the stock fell an additional 2.7% in after-hours trading to $216.10, although it has since rebounded to around $222.

      Last Friday, Tesla experienced its seventh consecutive week of losses, marking the longest losing streak since its public debut in 2010. The company's market cap has suffered a considerable blow, down nearly $800 billion from its peak in December.

      It's apparent that investors are not pleased with Elon Musk’s close involvement with the Trump administration, particularly his role in leading the Department of Government Efficiency (DOGE). Earlier this week, Musk informed Fox Business that he intends to remain in the Trump administration for another year. When questioned about managing his other businesses, Musk responded that it is done "with great difficulty."

      Adding to Musk’s troubles, X (formerly Twitter) faced a significant cyberattack on Monday, leading to major disruptions—definitely not the kind of stability investors desire.

      Declining Sales: The Inevitable Downturn?

      Significantly, it's not solely Musk's political engagement that has led to Tesla's dwindling stock price. Data from several crucial global markets indicate that sales are declining and demand for the brand's EVs is starting to wane.

      In a client note released on Monday, UBS analysts projected Tesla would sell 367,000 vehicles in the first quarter of this year, according to a Yahoo Finance report. This would represent a 6% drop from the 386,810 vehicles delivered in Q1 2024, which itself was a notable 9% decrease from the 422,875 units delivered in Q1 2023.

      Nevertheless, despite the recent slump in Tesla shares, it continues to hold the title of the world’s most valuable automaker by market capitalization. As of Monday, it was valued at $696 billion—still vastly ahead of traditional automakers such as Ford ($39 billion), General Motors ($47 billion), and VW ($64 billion). This valuation is partly attributed to the perception of Tesla not merely as a car manufacturer, but as a technology company at the forefront of artificial intelligence with its autonomous driving technologies and humanoid robots.

      So, is this decrease in stock price merely a temporary setback, or have Tesla’s days as a market cap powerhouse come to an end? Only time will reveal the answer, but for now, the journey appears to be a bit rockier than before.