Tesla Inc. (TSLA) has long been a dominant force in the electric vehicle (EV) market, but its stock has been on a rollercoaster lately.
A dramatic selloff wiped out $29 billion from Elon Musk’s net worth, raising questions about the automaker’s future.
Adding to the intrigue, former President Donald Trump announced he would buy a Tesla as a public show of support for Musk, further stirring debate around the company’s prospects.
This analysis breaks down the key reasons behind Tesla’s recent stock volatility and examines the potential impact of Trump’s endorsement.
Why Is Tesla’s Stock Dropping?
Production Woes and Falling Sales
Tesla has struggled with production setbacks, especially for its flagship models like the Model 3 and Cybertruck.
The company reported a 5% decline in U.S. deliveries for Q1 2025 and an even more alarming 49% drop in shipments from China year-over-year. These declines have raised red flags about Tesla’s growth trajectory, contributing to the downward pressure on TSLA stock.
Economic Headwinds
Rising inflation, supply chain disruptions, and increased competition from both legacy automakers and EV startups have weighed heavily on Tesla. Investors are increasingly concerned about how these factors will affect the company’s profitability and long-term stability.
Political Controversy and Consumer Backlash
Elon Musk’s political affiliations have become a flashpoint, leading to boycotts and protests against Tesla. Some showrooms and vehicles have been vandalized in response to Musk’s close ties with Trump, reflecting broader societal divisions. This controversy has only added to investor uncertainty.
Wall Street’s Losing Confidence
Analyst downgrades have further rattled Tesla’s stock. Concerns over demand and operational struggles have led to reduced price targets for TSLA shares. As of March 10, 2025, Tesla’s stock stood at $222.15, a significant drop from its previous highs.
Trump’s Surprise Tesla Endorsement
On March 11, 2025, Donald Trump made headlines by announcing his intention to buy a “brand new Tesla” as a gesture of support for Musk. In a statement, Trump praised Musk as “a truly great American” and blamed “Radical Left Lunatics” for trying to undermine Tesla.
“In any event, I’m going to buy a brand new Tesla tomorrow morning as a show of confidence and support for Elon Musk.”
The timing of Trump’s endorsement—amid Tesla’s stock slump—raises questions about its potential impact.
What Does Trump’s Support Mean for Tesla?
- Investor Sentiment – A high-profile endorsement like this could help stabilize market confidence in TSLA stock.
- Political Messaging – Trump’s backing frames Tesla’s troubles as politically motivated, potentially boosting the brand among conservative consumers.
- Public Relations – The move may attract new buyers who align with Musk’s and Trump’s views, offsetting some of the backlash from other consumer segments.
Investor Takeaway: A Volatile Road Ahead
Tesla’s stock remains highly unpredictable. While Trump’s endorsement could provide short-term support, the company’s fundamental challenges—declining sales, production issues, and competitive pressures—remain unresolved.
Investors are left weighing whether Tesla’s current downturn presents a buying opportunity or signals deeper structural problems within the company. The coming months will be critical in determining Tesla’s next chapter.
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