Tesla Inc. shares are experiencing their worst weekly performance since the US presidential election, plummeting 7.5% due to dismal global sales figures. The electric-car maker's stock has been impacted by a decline in sales across Europe, particularly in Germany, France, and the UK, as well as a slowdown in China, one of Tesla's biggest markets. This comes amidst growing concerns about the influence of Elon Musk's political affiliations on Tesla's performance. Musk's recent embrace of a far-right party in Germany and his public clashes with the UK Prime Minister coincide with a sales dip in those countries. Analysts speculate that Musk's close relationship with President Trump, while initially beneficial, may now be negatively affecting the company's image and sales.
While Elon Musk has been making headlines with his endeavors to reshape the US federal workforce, the stock of his electric-car company is on track for its worst weekly performance since the US presidential election. Tesla Inc. shares have dropped 7.5% this week through Thursday’s close, weighed down by shockingly bad sales reports from around the world. In Germany , sales plummeted last month to the lowest since 2021, and they tumbled in France and the UK as well.
The news from China, one of Tesla’s biggest markets, is also bleak. Deliveries fell 11.5% year over year — while the shares of Chinese competitor BYD Co. notched their best week since 2020 as investors cheered an update to its smart-driving technology. The battering has left Tesla’s stock down 22% from its Dec. 17 record closing high. It reached that peak after nearly doubling in the wake of Donald Trump’s election victory, as Musk established himself as the president’s right-hand man. That honeymoon has given way to the day-to-day reality of running an electric-vehicle maker at a time when the new administration’s policy is turning away from the industry and as Musk has become an increasingly polarizing figure.The European sales weakness may signal that Musk’s political leanings are impacting Tesla’s performance. In recent months, he embraced a far-right party in Germany and picked a fight with the UK Prime Minister ahead of results showing that sales fell in Europe’s three largest markets. In early February, Trump boosted tariff threats on the European Union while engaging in brinkmanship over levies against Canada and Mexico. “There is an argument to be made that Tesla is beginning to be penalized for Musk’s close relationship to Trump,” Mike O’Rourke, chief market strategist at Jonestrading, wrote in a note. Of course, some investors hope that Musk’s proximity to the president will benefit the carmaker, for example, by helping ease the regulatory pathway for his ambition to develop a self-driving car. But for now, Tesla’s stock is the biggest laggard this year among firms in the Bloomberg Magnificent Seven Index, which tracks the megacap tech-related shares that have been the source of much of the market’s strength. It’s also the most expensive to hold in that group, with a valuation that’s roughly three times as high as the rest of the cohort, even after its recent slump. Some market-watchers say there could be further downside ahead for Tesla and that investors should wait to jump in. “I expect that TSLA likely does bottom within around 2-3 weeks from now and turn up sharply,” Mark Newton, head of technical strategy at Fundstrat, wrote in a note. “However, at this time it remains within a short-term downtrend with an incomplete pattern and volume which is still far heavier on the downside.” There may be a window to buy Tesla at a steeper discount in the coming weeks, and the next level he’s watching is around $350 a share, compared with about $374 at Thursday’s close. The shares edged lower in Friday morning trading in New York.Wall Street is largely split on Tesla shares. Roughly half of analysts covering the company give it a buy-equivalent rating, while the other half say to hold or sell. The average 12-month price target is about $360, according to data compiled by Bloomberg
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