Tesla’s Stock Collapses In Its Biggest Drop In 5 Years Wiping Out $800 Billion

In the weeks following Donald Trump’s election win, Tesla’s stock price went on a rocket ride, hitting a record $479 per share, and taking Elon Musk’s net worth to stratospheric heights—boosting it by more than $150 billion. But fast forward to today, and the scene has changed dramatically. Since Trump’s inauguration, Tesla shares have been on a downward spiral, dropping more than 15% on Monday alone to $222, a level not seen since last October.

This latest tumble marks Tesla’s worst single-day loss since September 2020, and it’s down more than 53% from that glorious peak of $479 back in mid-December. At the time of writing, the stock had dropped another 2.7% in after-hours trading to $216.10, though it has since jumped back up to around $222.

Last Friday, Tesla recorded its seventh consecutive week of losses, marking the longest losing streak the company has seen since going public in 2010. Its market cap has taken a significant hit, now down nearly $800 billion from its December peak.

Read: Tesla Sales Crash Up To 63% In European Markets, Is Musk Or New Model Y To Blame?

It’s clear that investors aren’t exactly thrilled with Elon Musk’s deep involvement in the Trump administration, particularly in leading the Department of Government Efficiency (DOGE). Earlier this week, Musk told Fox Business that he plans to stay in the Trump administration for another year. When asked how he manages to run his other businesses, Musk replied, ‘With great difficulty.’”

To make matters worse for Musk, X (formerly Twitter) was hit with a massive cyberattack on Monday, causing major outages. Not exactly the kind of stability investors are hoping for.

Falling Sales: The Inevitable Decline?

Of course, it’s not just Musk’s political involvement that’s to blame for Tesla’s plummeting share price. Data from several key markets around the world show that sales are declining and demand for the brand’s EVs is starting to slow.

In a note issued to clients on Monday, UBS analysts said they expect Tesla to sell 367,000 vehicles in the first quarter of this year, according to a report from Yahoo Finance. That would be a 6% decrease from the 386,810 vehicles delivered in Q1 2024, which itself marked a significant 9% drop from the 422,875 delivered in Q1 2023.

However, despite the recent tanking of Tesla shares, it remains by far the world’s most valuable carmaker by market cap. As of Monday, it was valued at $696 billion—still well ahead of legacy automakers like Ford ($39 billion), General Motors ($47 billion), and VW ($64 billion). This is partly because many investors don’t view Tesla as just a car manufacturer, but as a technology company pushing the boundaries of artificial intelligence with its autonomous driving systems and humanoid robots.

So, is this drop in stock price just a temporary blip, or have Tesla’s days as a market cap juggernaut come to an end? Only time will tell, but for now, it looks like the ride is a little bumpier than before.