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Tesla has been on a roller coaster ride since Musk went to Washington, D.C., to take on a major role in the second Trump White House, which of heading Trump’s advisory DOGE, which is engaged in a broad, controversial effort to reduce federal government spending and slash employee headcount at dozens of agencies.
Tesla just suffered a seventh straight week of losses. Since peaking at $479.86 on Dec. 17, Tesla shares have lost more than 50% of their value, wiping out upward of $800 billion in market cap. Tesla also led a broader slump in U.S. equities, with the Nasdaq tumbling almost 10%, its steepest decline since 2022 as well as tipping into correction territory.
So what exactly drives the dramatic sell-off of Tesla shares since Musk actively involved in the politics? The driving forces that drive Tesla to continuously move upward before are the momentum and fundamental, which both are deteriorating right now and results in the plummet of share price.
On the fundamental side, the downdraft in Tesla’s stock was mainly tied to uncertainty surrounding President Trump’s plans on tariffs. Canada and Mexico are key markets for automotive suppliers, and increased tariffs, with the potential for a trade war, will likely affect production and lead to higher prices.
During an interview on Fox Business, Musk was asked how he manages to run his businesses while fulfilling his role in the Trump White House. He said he’s doing so “with great difficulty.” There is big divergence between bullish and bearish analysts on the trend of Tesla. Bullish analysts say that Musk’s White House presence could be a boon for Tesla, whose future lies in autonomous driving and robotics. “The story for Tesla going forward is autonomous and robotics, and we’ve never viewed Tesla as an automobile company,” said Wedbush senior analyst Dan Ives. Also Billionaire investor Ron Baron is standing by Elon Musk’s Tesla，He said he wouldn’t sell a single share personally, and that’s what he has done. On the flip side, more bearish analysts and investors aren’t so sure. They argue that the Trump administration’s moves to strip away a lot of EV-friendly policies will all be disastrous for the company. As for the future trajectory of Tesla, investors should watch closely in order to make accurate investment decision.Complete digital access to quality Glebors financial topic with expert analysis from industry leaders.
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